Reference no: EM132102075

In 2009, Lindenwood Pharmaceuticals, Inc. purchased all of the stock of Hinckley Chemical Company, a chemical company located in Hinckley, Missouri. Lindenwood Pharmaceuticals, Inc. operated Hinckley Chemical Company as a wholly owned subsidiary and renamed it Lindenwood Chemical Company. At the time of the purchase, Lindenwood Pharmaceuticals made a $13,000,000 infusion of capital into its new chemical subsidiary. Lindenwood Chemical had a seven member Board of Directors, who were named to the Board by Lindenwood Pharmaceuticals, its sole shareholder. One of the seven Board members of Lindenwood Chemical's Board of Directors also sat on the Board of Directors of Lindenwood Pharmaceuticals. Lindenwood Chemical Company provided annual reports to Lindenwood Pharmaceuticals regarding its business operations. In 2010, Uli Martschalk, the former head of engineering for Lindenwood Pharmaceuticals, was hired by Lindenwood Chemicals as its Vice President of Environmental Policy for Lindenwood Chemicals. In January 2015, Lindenwood Chemicals sold its assets, discontinued its business operations and was dissolved as a corporation. The proceeds from the sale of assets were distributed to Lindenwood Pharmaceutical in 2016 when Lindenwood Chemicals was dissolved. In August 2017, it was discovered that Lindenwood Chemicals had been illegally dumping chemical wastes in violation of federal and state environmental laws since 2005. Martschalk became aware of the dumping in 2012, two years after he joined Lindenwood Chemicals, and continued the practice. Residents living near the chemical dump site sued Lindenwood Pharmaceuticals for personal injuries, claiming that they have developed cancer as a result of the ground water contamination caused by the illegal dumping of chemical wastes. You are hired by Lindenwood Pharmaceuticals to advise them on the strengths and weaknesses of the plaintiffs' claims against it. Explain in detail your advice to Lindenwood Pharmaceuticals.