Cases - Cases ADM 3360 Due Date: March 24 2009 M.N. Sylvie...

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Cases ADM 3360 Due Date: March 24 2009 M.N. Sylvie Levasseur Andrew Wigmore 4470968
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Question 1 Facts: Acme Forwarding Company leased docking and warehouse facilities at a harbour. The lease gave the company exclusive use of the pier and the buildings, but held the company responsible for the maintenance and repair of the pier. Baker, a director, was responsible for the authorization of use of the pier by ships bringing cargo for off-loading at the company warehouse. Company policy was that only ships handling goods destined for the company warehouse were to use the pier. No other authorization would be given unless ship owners carried adequate insurance to cover any damages done to the pier that may arise due to carless docking. Baker also held an interest in a shipping firm that wished to off-load a small cargo at the city where the Acme Forwarding Company pier was located. The shipping company, however, wished to place the cargo directly onto two trucks rather than use the facilities of Acme Forwarding Company. Baker, with the intention of accommodating the shipping company, authorized the docking of the ship at the pier and when the ship attempted to dock with its cargo, it collided with the pier, causing extensive damage to both the ship and the pier. Under the terms of the lease that Acme Forwarding Company had with the property owner, it was obliged to repair the pier at a cost of $120 000. They then looked to the shipping company to recover the cost of the damage caused by the ship. The shipping company, which had suffered damage to its only ship, was unable to pay for the damage to the pier. Their insurance would cover only a part of the $120 000 cost of the pier repairs. The directors of Acme Forwarding Company were also informed that Baker was a shareholder in the shipping company. Legal Question: Given that Baker did not disclose the fact that he was a shareholder of the shipping company that caused damage to the pier or that he was the main beneficiary of the transaction; did he breach his fiduciary duty by putting personal interest above Acme Forwarding Company?
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Given that, Baker should not have authorized the shipping company to let its cargo off at the dock because the cargo was going directly to a truck and the shipping company did not have to adequate insurance to cover any potential damage, and Baker is a shareholder in the shipping company, should Baker be held liable? Legal Principles: The Nature of a Corporation and Its Formation Corporation : a legal person formed by incorporation according to a prescribed legal procedure. In the eyes of the law, a corporation is a legal entity that has same attributes as an individual. It is a conceptual legal term since it is a legal entity; it has a legal name that must be identifiable (LTD., INC.), date of birth, address or place of business, etc. To start a corporation, at least one shareholder/ director and one share are needed for activation. A corporation must be
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Cases - Cases ADM 3360 Due Date: March 24 2009 M.N. Sylvie...

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