To: Fred & Sally
From:
Date:
Subject: Legal Issues
What legal defenses might Fred and Sally raise with regard to the checks written by Jane to Don? Why do you believe they will be successful or unsuccessful?
Almost in all small businesses, unfortunately, embezzling has become a more and more common issue. In this case, this is what seems to take place. Jane is believed to have done what is known as accounting embezzlement, which is associated with manipulating the accounting records and cooking the book. The aim of doing this is to hide the funds’ theft. In relation to ‘the balance’ (Murray, 2017), for Jane to be charged with the embezzlements, there is a need for ensuring for proving four factors. These factors include; the existence of a fiduciary relationship between the parties involved; this suggests that reliance by one party on the other must be there; there is a need to ensure that the defendant acquired through the relationship (instead of some other manner), the property. Another factor that can be taken into consideration is that ensure that the defendant had taken ownership of the property or even transferred it to another person. Lastly, the actions of the defendant were intentional.
The fact that all these factors can be proven you need ought to successfully charge Jane with the checks, which she made payable to the loan shark Don. It is apparent that, knowingly, Jane decided to forge both signatures to defraud. You can testify, in the court of law, that you never signed the check, and if possible, there is a room for hiring a handwriting analyst to prove this fact. One issue that is likely to come up is that the court of law will want to determine if the sign issue is a case of negligence. In case the party whose sign is forged happens to behave negligently, the party can be precluded from escaping the liability. For accepting, as well as chasing the checks, Don can be held liable. It is a fact that loan sharks are known for practicing illegal business, so there is a possibility that he knows that the check was forged and went ahead to cash them. Forgery is known for being a felony and is punishable by several penalties, including prison or jail time, probation, significant fines, together with restitution. Therefore, I believe we can successfully recover some of the amounts that Jane embezzled and from Don, the loan shark for the negligently cashing the checks without verification of the endorsement.
1. What legal defenses might Fred and Sally raise with regard to the check written by Jane and delivered to the church? Why do you believe they will be successful or unsuccessful?
In relation to the check that Jane presented or wrote to the church to help absorb her guilt was a forgery. Jane falsely signed the check and, in essence, donated not approved the cash to the organization with informing Fred and Sally. In such a scenario, the forging of the signature on the check was not done to Jane’s financial benefits, and she was unintentionally trying to cause harm; therefore, this would still have more of a difficulty to succeed.
Depending on the amount given to the church, you can leave it or contact the church and inform them the check had a forged signature and is invalid. Moreover, the check is made out to cash and therefore, the church is not in a position of even trying to cash it or even suspect that there is something wrong with it. The church is a holder-in-due since the check was given to them, and there is a greater possibility that they received it in good faith and such a situation, they can be protected by the law. Nevertheless, according to UCC [3-501 (b)(3)], which states that “without dishonoring the instrument, the party to whom presentment is made may (i) return the instrument for lack of necessary endorsement,” the church can consider dishonoring the check. I believe we can retrieve this money, the donated money to the church, because of its illegal authorization, which makes the check to be considered legally invalid.
1. What, if any, civil claims do Fred and Sally have against Jane based on her actions? Why do you believe they will be successful or unsuccessful?
A prosecutor can prosecute an act of fraud as a criminal fraud and a civil action by the party that was the misrepresentation’s victim. The greatest difference between a criminal case and a civil fraud is that the actual damage ought to occur in a civil case, and this is beyond the person who is pursuing it (Bochetto & Lentz, 2016). This kind of offense is known for being very serious. Jane, as a bookkeeper, is likely to face certain serious problems. According to Section 11 of the Securities Act of 1933, bookkeepers are known for being civilly liable for omissions and misstatements of material facts made in the registration statements. When bookkeepers cannot perform their jobs based on their professionals’ generally accepted practices and standards, they become liable (Kubasek et al., 2013). Section 11 also states that the bookkeepers are civilly liable for the omissions and misstatements of material facts made in the registration statements filed with the Securities and Exchange Commission. With this claim, I believe we will succeed since Jane siphoned the corporate money and falsified the accounting records to give a misleading picture of the company’s financial position. Jane misled the company with the intention to defraud. Due to the embezzlement by Jane, the court is going to rule in your favor.
1. Analyze the forms of bankruptcy available to the business in this instance (assume the business entity is the same form as you chose in Case Study 1). What form is most appropriate, and why?
Various kinds of bankruptcy can be a solution for you, in chapter 7, the appointment of a trustee, selling of the available assets, and paying creditors to the extent available. In chapter 13, there is a restructuring option for small businesses operated and owned by individuals (Kubasek et al., 2012). Since you are an LLC, you cannot file Chapter 13 since it is meant for individuals. Chapter 11 is the other bankruptcy alternative for small businesses. It is somehow more expensive and complex than other kinds of bankruptcy; nevertheless, this chapter gives you room to keep your assets and reorganizing the company to continue with the business and not to close it. Based on this, Chapter 11 can be the best option for this case. Several businesses settle for this kind of bankruptcy because it can keep the business. It is through this that your financial structure can be reorganized and continue to produce the cough syrup.
1. Analyze the implications of a potential bankruptcy action on the business assets (assume the business entity is the same form as you chose in Case Study 1). Explain which, if any, are subject to forced sales, liens, or forfeiture.
The fact that the family has been running the business out of their home or farm, it can be difficult to tell the exact thing that will be sold. The company is also an LLC. They cannot be personally held accountable for the company’s liabilities and debts; therefore, anything personal, which they own, cannot be claimed to be a business property, and it ought not to be liquidated.
1. Analyze the implications, if any, of a potential bankruptcy action by the business on the assets of the individual family members (assume the business entity is the same form as you chose in Case Study 1). Explain if the assets of business owners are subject to forced sale, liens, or forfeiture.
With the LLC’s entity chosen, owners cannot be personally liable for liabilities or debts, for they cannot be forced to consider selling their personal assets.
1. What legal recourse does Fred have against Bob for infringement of intellectual property rights? Do you believe he will be successful? Why or why not?
Fred ought to be successful. The fact that Bob posted online, this is a proof of action that was taken in his vengeance’s act. Bob clearly exploited the Cough Syrup of Fred without appropriate permission because it was patented. With malicious intent, he did it. should Fred seek legal actions against Bob, there should not be foreseen issues since Bob decided to do it in a very public manner. So, it would be difficult for him to prove that he intended to harm Fred and his business.
