legal aspects of business decisions

SoccerBoss
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Question description


Goliath, Inc., a United States producer of gem quality sapphires, set up a
subsidiary holding company in the Cayman Islands (Junior, Ltd.) to control all
of Goliath's non-United States subsidiaries. Junior then entered into a cartel
agreement with producers of sapphires in those countries (other than the US)
where sapphires are found. The cartel agreement allocated markets and set prices
for all sapphires sold outside of the United States. The United States
government has now brought suit against both Goliath and Junior for violating
the US Sherman Antitrust Act. Goliath answers that it was not a party to the
cartel agreement and that the agreement does not affect the US market for
sapphires. Junior answers that it is not subject to the jurisdiction of the US
courts.



  1. Are Goliath and Junior correct? Explain!

  2. If they are incorrect, explain why.

  3. What options do they have?


One of the problems that occur when businesses establish subsidiary companies
in foreign countries is the issue of who is responsible for which company. The
resolution of this issue has serious implications for all of the employees of
both companies as well as the communities that both companies serve. Discuss the
economic, political, social, and legal implications of this kind of situation.

 

 

 

 

 

 

 

 

 

 

 

 

 

Tutor Answer

(Top Tutor) Daniel C.
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School: UC Berkeley
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