Levi is the director for a milk production company.On the side, he and his brother Ray own a nearby McDonalds Restaurant franchise that uses sweetened milk products to make ice cream.Recently, that McDonalds' contract with a different milk production company was ended due to price disagreements.Levi has offered a contract for sweetened milk on behalf of his own milk company to the McDonalds that he owns with his brother.Which of the following statements regarding that potential transaction is FALSE?

Question

Quizplus · Accepted Answer

Levi, as a director of the milk production company, cannot vote on or approve contracts in which he has a conflict of interest. This potential transaction presents a clear conflict of interest, as Levi would be both the director of the milk company and co-owner of the McDonalds franchise that would be receiving the contract. Therefore, Levi must recuse himself from any vote or approval related to this transaction.

Levi Is the Director for a Milk Production Company