Author Question: Four years ago, Ben Ratzi incorporated a corporation and became the sole shareholder, director, and ... (Read 831 times)

NguyenJ · **on:** Aug 7, 2021

Four years ago, Ben Ratzi incorporated a corporation and became the sole shareholder, director, and officer. He loaned the corporation $10 000 and took a debenture from the corporation as security for repayment of the loan. The corporation prospered. Last year, your brother began supplying the corporation with office supplies. He was paid at the end of each month for supplies delivered during that month. For the last six months, however, he has not been paid. He learned that other suppliers had not been paid either because sales dropped drastically, apparently due to Ratzi's harsh management style, which has upset the entire staff. Which of the following is true?
◦ If your brother decided to sue for the debt, he could sue Ratzi because he was the sole shareholder and his management style caused all of the trouble.
◦ Your brother could take an action under statutory "relief-from-oppression" provisions.
◦ If this corporation were placed into bankruptcy, Ratzi would be in a better position than your brother for receiving proceeds realized from the sale of the assets of the corporation.
◦ Your brother has no claim against the corporation because it has limited liability.
◦ If Ratzi dies, his corporation would automatically die too, and there wouldn't be any person to sue.

billybob123 · **Reply #1 on:** Aug 7, 2021

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