Before we get into the Jury assignments, I like us to help each other with any tips we may have for posting in the Discussion Board. Or, maybe you have noticed something about my grading that others haven’t and you’d like to “warn” them. 🙂
Here is my help: a response in a jury is something substantive. Here’s an example of a response that was long but said absolutely nothing.
“I enjoyed reading your post, it is very clear and you covered all the necessary explanation for each question. I can see that according to the law since the proper measure were not taken, the violins belong to the children’s. I totally agree with you on question number two because I believe Susan’s claim is reasonable as well because as you stated she was always there for Jason when Jason’s children were never around. After all, I enjoyed reading your post and great explanations.”
This says, to me, “I have nothing to say so I’ll complement and agree with you but make it in 4 sentences so it looks like something!
Q1: The suit filed by Diana against Arnold is referred to as a derivative suit. Derivative suit is a lawsuit that is brought by one of the shareholders on behalf of the corporation (Miller and Hollowell 132). Generally, the shareholder will choose to act on behalf of the cooperation in cases where they may feel that the organization may have a valid cause of action, but chooses not to act on it instead. Derivative lawsuits play an important role in protecting the rights of the minority in the organization in cases where especially the directors of the organization may likely take them advantage. In this particular case, Arnold is one of the main directors at Beta. Other than this, he is also among the majority shareholders in the company holding both preferred and common stock in the company, which in total give him 47% voting rights in the company. To add to this, Arnold forms a different company known as Commercial Property, which primarily deals with the sale of land. He has a buy purchase option for a piece of land next to Beta, which is owned by his other company the Commercial Property, and orders the real estate agent of Beta to negotiate for the buying of this land. Diana, who is among the minority shareholders in Beta, formally companies to the board regarding Arnold’s action although no action is taken against him. Consequently, she files a suit against Arnold.
Q2: The plaintiff in the court of law is the person who brings the case against the other individual. As such, in the given case above, there are two plaintiffs, the cooperation, and Diana as a minority shareholder in the company (Miller and Hollowell 45). Similarly, on the defendant side, there are still two parties, which will be Arnold as part of the management in the cooperation that the suit was filed against and the corporation itself. However, it is important to note that in this particular case, the corporation will only be a “nominal” defendant, which simply implies that company is only a defendant as a formality. In the suit, the plaintiff shareholder will thus try to prove that the corporation, through the management failed to take some action, which could have affected the overall value of the firm. On the other hand, the defendant will try to prove that his actions were necessary and that he was acting on the best interest of the organization as per the Articles of Association.
Q3: There are defenses that could be used by both of the defendants in the lawsuit. For the corporation, one of the arguments that could be used on their behalf is the fact that they may not have been aware of the fact that Arnold was not acting in the best interest of the firm when he presented the idea that they should purchase the land, as it would ultimately benefit them in the end. Despite the fact that the other directors in the corporation may have been in contact with him from time to time, there is no guarantee that they were aware of his actions in every step and thus limiting their ability to take actions any different than what they did. Arnold on the other hand could use the argument that all the decision that he made regarding Black acre were in the best interest of Beta. Eventually, it is evident that this piece of land could be beneficial for the long-term success of the company in the market. In addition, there is also the fact that he has presented the firm an opportunity to acquire loan at an even lower interest rate than what is available in the market. The main implication of this in the end is that the company gets to save further securing their investment in the market. Second, the other argument that Arnold may use is the fact that he acted in accordance with the Articles of Association of the company. Before settling on the purchase of Black acre, he brought the suggestion for a vote among the Board of Directors who approved it given that they saw it as a good opportunity for their business. As long as the stipulations of the Articles of Association of the company were followed, them there was no breach of duty (Miller and Hollowell 148). It was a case where he may have made the decision without necessarily including the rest of the Directors in the firm then it would have been safe to argue that he was not acting in the best interest of the firm. Purchase of the land will allow Beta to expand their offices and production plant, which will not only improve the net worth of the company but also ensure more profits for the company shareholders.
Q4: Based on the above analysis, it is evident that the defendant may likely win the suit given that he has a strong defense against the action brought against him. Irrespective of the fact that Arnold may have taken up many roles, which to some extent may have steered his focus away from his main duties in the firm, the reality is that he still acted in accordance to the Articles of Association of the firm, which seek to ensure that the Directors understand their roles.
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