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John Hollin was an officer, director, and employee of a large broadly held corporation. At a directors' meeting, he learned that the corporation was voting on a resolution to buy a piece of property from Sam Keanu for $100 000. It happened that Hollin was one of three co-owners of that property. Hollin voted for the purchase and the resolution passed without discussion by a vote of 5–0. Several months after completion of the purchase, the other directors learned of Hollin's ownership and called on him to account to the corporation for any profit made.
a) Identify and discuss the legal liabilities of Hollin. Discuss the remedy available to the shareholders.
Joe was the director of XYZ Corporation, and the corporation was experiencing some financial difficulties. The shareholders had received dividends over the years, and this year insisted that they be paid a similar dividend, despite the fact that the corporation did not have enough reserved funds to pay off its debts. Joe, along with the other directors, complied with this request, and a few months later, the corporation was unable to pay a required payment on a bank loan.
b) Identify and discuss the principal of law engaged. What will be the liability(s) of Joe?
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