Fiduciary Duties, law homework help

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Anarggr

Business Finance

Description

Fiduciary Duties

Jimmy is the CEO of News Corp. His son, Johnny, runs Television Inc.  One day Jimmy suggests that Johnny sell Television Inc. to News Corp.   Jimmy and Johnny work together to radically inflate the value of Television Inc. Jimmy brings a proposal to the Board of Directors to buy Television Inc. for $500 million dollars even though the corporation is only worth $2 million.  The board of directors diligently examines the transaction, but due to clever forgeries, the board does not discover the radical inflation of the corporation.   Jimmy never discloses his relationship with Johnny.  The sale goes through, and it is shortly discovered that Television Inc., is practically worthless. 

  • A shareholder sues alleging that Jimmy violated his fiduciary duty of loyalty.  
  • Additionally, the shareholder claims that the directors violated their fiduciary duties of care.  
  • Is the shareholder correct? 

The requirements below must be met for your paper to be accepted and graded: 

  • Write between 500 – 750 words (approximately 2 – 3 pages) using Microsoft Word.
  • Attempt APA style, see example below.
  • Use font size 12 and 1” margins.
  • Include cover page and reference page.
  • At least 60% of your paper must be original content/writing.
  • No more than 40% of your content/information may come from references.
  • Use at least two references from outside the course material, preferably from EBSCOhost.  Text book, lectures, and other materials in the course may be used, but are not counted toward the two reference requirement.

Reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) must be identified in the paper and listed on a reference page.Reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) must come from sources such as, scholarly journals found in EBSCOhost, online newspapers such as The Wall Street Journal, government websites, etc.  Sources such as Wikis, Yahoo Answers, eHow, etc. are not acceptable. 


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Explanation & Answer

Attached.

Running Head: FIDUCIARY DUTY AND FIDUCIARY LOYALTY

Fiduciary Duty and Fiduciary Loyalty
Name
Institution

1

Fiduciary Duty and Fiduciary Loyalty

2

Fiduciary Duty and Fiduciary Loyalty
The shareholder is right that the CEO, Mr Jimmy, violated the fiduciary duties of care. As
a general rule in business law, the directors and officers of an organization such as CEOs must
act in their capacities as corporate fiduciaries. As such, they should act in the most appropriate
manner that any prudent person in his world can act.
In our case, a prudent person the position of Mr Jimmy should have not forged figures of
the Television Inc in an effort to inflate the realistic value of the company. Additionally,...


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