Preliminary Considerations With Fiduciary, Corporate,...

Preliminary Considerations With Fiduciary, Corporate,...
Preliminary Considerations With Respect To Tax, Corporate, Securities and Regulatory Law [Level
3 Practice Note] When planning a divestiture, the parent [and its advisors] must tailor the structure
of the transaction to meet the strategic objectives of parent. It is imperative that such objectives be
clearly articulated so that the parent and its advisors are able to develop a structure that (a) achieves
the business and financial goals, including tax treatment, parent intends, and (b) may be executed (i)
in the time frame parent anticipates and (ii) most efficiently taking into consideration (A) corporate
and securities laws at the state level, (B) securities laws, anti–trust laws, and laws governing foreign
ownership of US assets, at the federal level, and (C) overall transaction cost. Following are key tax,
corporate law, securities law and antitrust and other regulatory issues typically considered in
selecting and developing the structure for a divestiture transaction. For more detailed analyses of
such issues, see the practice notes for Sales of a Division or Subsidiary, Equity Carveouts, and
Spin–Offs . Tax Considerations. Note that tax treatment is often a primary driver in selecting and
tailoring a transaction structure for a divestiture. Following are key tax considerations: Corporate
Level Sale of Assets or Stock: Sales of assets or stock to a third party are generally taxable to the
parent to the extent the purchase price exceeds the parent's basis in the
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Corporations Should Pursue Goals Creating Profit For...
Whether or not corporations should pursue goals besides creating profit for shareholders has long
been a matter of debate. For my part, the statement that "The actions undertaken by a corporation in
the pursuit of shareholder wealth are justified, as long as they are not illegal" is valid. The reasons
are presented below.
To begin with, a corporation is created for the purpose of creating wealth for shareholders. In terms
of property rights, shareholders that invested the principal are the joint owner of the tangible assets
and residual revenues of the corporation, with the management serving as the trustee for the
property. In Friedman's (197x) view, since the shareholder is the owner of the business, the
corporation has only one ... Show more content on Helpwriting.net ...
Advocates of social welfare argue that firms are obliged to act in a socially responsible manner.
Dodd (xxx?) also argued that businesses must engage in social services, even at the expense of
profits, in order to serve the best interests of employees, creditors, customers, and other
stakeholders, as it appears that there exists a positive relationship between social and financial
performance (xxx?), and socially responsible business practices affect all aspects of business
operations and contribute significantly to corporate productivity and profitability (Website of
Business for Social Responsibility). In other words, a corporation should engage with social
interests in order to fulfil its social responsibility and to maximise long–run profits.
In the case that there is no conflict between the search for profits and the general interest of society,
then a corporation can simply pursue both interests at the same time, and certainly the actions
undertaken in the pursuit of shareholder wealth are justified, so long as they are legal. For instance,
Delfglaauw (2000) claimed that owing to the advancement in technology, individuals' action and
reactions are increasingly visible and immediate. Companies are also under public scrutiny as never
before. Under such circumstances, interest of shareholders and the society at large are aligned.
Corporations should pursue both shareholder wealth and meet the increasing social expectations, for
a flawed public image of a

Gagnon V. Coombs: Case Study
In the case of Gagnon v. Coombs, Joan Coombs did not have the right to convey the Shelburne farm
to a trust that Joan herself established. Joan was the agent and Francis Gagnon was the principal in
this case. At the time when Joan transferred the property to the trust she was no longer an agent but
was unaware. Even though Joan thought she was still an agent she did go against the duties of an
agent, thus not giving her the right to move the property to a trust.
Joan as the agent for Francis has a fiduciary duty to act loyally for Francis's benefit in all matters
connected with their principal/agent relationship (Beatty & Samuelson, 2013). When Francis told
Joan that he gave the property to Frank, Joan retaliated by transferring the property

The Managerial Shift Toward Stakeholder Relationship...
There has been a shift in managerial attitudes toward, and consideration for, social and
environmental issues in recent decades (Parnell, Scott, & Angelopoulos, 2013). While mangers have
traditionally been obligated to work for the good of the shareholder, widespread adoption of the
stakeholder theory demands that managers seriously consider the impacts of the firm's decisions on
all affected outside parties, or stakeholders (Boatright, 1994; Parnell et al., 2013). However,
purchasing and supply chain management (PSCM) in practice seems to remain oriented toward
profit maximization, though interest in social responsibility is growing (Ferrell, Rogers, Ferrell, &
Sawayda, 2013). The managerial shift toward stakeholder relationship management has been
evident, yet the extent to which PSCM departments have embraced stakeholder theory is less
obvious.
This is problematic because PSCM is a developing discipline (Spina, Caniato, Luzzini, & Ronchi,
2013). Knowledge of actual policies and practices is important, as future research cannot address
real world problems based on assumptions. The purpose of this study is to determine the degree to
which stakeholder theory has been incorporated into companies' PSCM policies. This exploratory
research will fill a gap in the PSCM literature, informing future research by providing scholars with
a clearer understanding of the degree to which stakeholder theory has been adopted in PSCM.
Literature Review
Traditional and Stakeholder

What I Was At An Ethics Unit
it might be said
I OVERALL UNIT REFLECTION
The past few weeks have been tough and definitely not what I was expecting of an ethics unit. Week
in, week out I find myself stumped by questions I don't have the answers to. However more than
ever before I am trying to come up with decisive answers regarding what my opinion is on certain
ethical issues, rather than just analysing the merits and demerits of other people's viewpoints.
II STRUCTURE OF REFLECTION
For my reflection I will be outlining the main practical skills that I have gained from this unit
whether it be from the weekly readings, tutorial exercises and/or online modules and material. The
practical skills gained consist of intellectual, performative and affective skills all of which are
essential for practicing lawyers, however for the purpose of this reflection primary focus will be
placed upon intellectual and affective skills.
III PRACTICAL SKILLS
A Intellectual Skills
The online modules and weekly readings have introduced me to legal concepts that I was not aware
of before, thus increasing my intellectual skills. Some of these concepts include:
1 Cab rank principle
This is a rule contained in the New South Wales Barristers' Rules which requires a barrister to
accept a brief from a solicitor, provided they meet the requirements set out and do not have reasons
as outlined in Rules 95, 97, 98 or 99, for refusing. Whilst there are many exceptions to the rule I still
struggled with the idea of being made to

Tippee's Fiduciary Duty
The fiduciary duty to shareholders is also present in common law as a duty amongst two people
committing a transaction, where "one who fails to disclose material information prior to ... a
transaction commits fraud only when he is under a duty to do so" (445 U.S. 229). It then describes
that duty as a result of "a fiduciary or other similar relation of trust and confidence between them"
(445 U.S. 229). The importance of this fiduciary duty is clear, and it is uncontested that Maher Kara
owed that duty to Citigroup. By disclosing confidential information to anyone, much less his
brother, Maher Kara was in violation of that duty. Next, it is important to derive the tippee's
fiduciary duty as a consequence of the tipper's. 15 U.S.C. § 78t(b) broadly

Business of Today
Introduction:
Section 2(13) of company's act defines a director may be defined as a person having control over the
direction, conduct, management, or superintendence of affairs of a company. Any person in
accordance with whose direction or instructions, the board of directors of a company is custom to
act is deemed to be a director of a company.
Section 2 (6) of the company's act states that the directors are collectively referred to as board of
directors are simply the borad.
Directors being pillars of corporate governance (Cowan, 2004) should at all times act honestly and
use reasonable diligence in the discharge of their duties. This is more so in light of recent major
corporate issues like ENRON & Worldcomm in the United States ... Show more content on
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Section 4 of the Companies Act 1965 stated that the director of a company is a person who is chosen
to be the directors or alternate directors apart from the given name upon on their position
(Rachagan, 2002). Director is not just only a person that formally selected to the office. Even though
they are not validly appointed, the s4 of the Act can as well consider certain persons to be directors,
but only if the contrary intention appears.
One of the duties that company directors need to comply with is fiduciary duties. This is so as
company directors are said to be in a fiduciary relationship with the company. When directors are in
a fiduciary relationship with the company, they are prohibited from doing any acts deemed
prejudicial to the company. In other words, by applying the judgment in Hospital Products Ltd v
United States Surgical Corpn, directors cannot and should not use his position to receive personal
gains.
The traditional view is that the directors owed a fiduciary duty to the company. This is the reason
why directors are prohibited from receiving personal gain from their status as directors in a
company. The nature of the relationship i.e. fiduciary relationship between directors and a company
rendered the directors to act for the best interest of the company. This point can be supported by
looking at Section 132(1) of the Companies Act 1965 which states that a director must act in bona
fide when exercising his powers for a proper purpose and

The On The Gross Amount Charged By The Employee Company
The first being that compensation was to be calculated on the basis of "determining the gross
amounts charged by [the employee company, in breach] in the invoices it sent to the wrongly
diverted customers and applying to those figures the profit margins that [the plaintiff company]
would have realised had it carried out the work, less tax."
Alternatively, Digital was entitled to elect an account of profits against the three defendants jointly
and severally. Those profits were to be calculated on the basis of the gross profits actually received
by Juice from diverted projects, less provision for tax. The final orders state that Digital elected to
take the account of profits, at $13,119.51.
Digital was successful in receiving an account of profits from both appellant, for breach of contracts
and fiduciary duty, and equitable compensation from one of the appellants for breach of duty and
misuse of confidential information.
The issue on appeal was Palmer J's order that Harris pay compensation in the sum of $11,000 for his
misuse of the confidential information. The appellants sought leave to appeal against the orders for
exemplary damages for breach of fiduciary duty, which was granted.
ACCOUNT OF PROFITS
In Dart Industries Inc v Decor Corporation Pty Ltd , Mason CJ, Deane, Dawson and Toohey JJ
found that "[a]n account of profits is confined to profits actually made, its purpose being not to
punish the defendant but to prevent its unjust enrichment." In the same

What Is Conflict Of Interest
Conflict of interest and the Principal–Agent relationship
Conflict of interest is defined in Walton and Henderson (2005) as circumstances in which some
interest of a person has an inclination to be at odds with the consistent exercise of his discernment in
another's interest. The idea of conflict of interest in that perception touches on positions of decision–
making with a practical importance such as a company management's discussion and acceptance of
a decision and determinations of a board of directors of a business establishment. Hence, the
conflict is a psychological one resulting from within a human or organization that is authorized to
make decisions (p.4–7).
Fiduciary Obligations
The most common fiduciary duties are the requirements to act in the principal's interest and the duty
of honesty. For example, most company codes of conduct requires the board of directors and the
management to carry out their duties with all necessary care and be truthful to the interests of the
business establishment. This requirement goes line in line with the corporation law that terms this as
interest of the company. The company's interest, in that legal set up is all interests that the
management has to consider when performing its duties on behalf of the ... Show more content on
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There are several ways through which conflicts of interest can be averted. One is by exhaustively
researching potential employees, potential customers and business partners. Two, business
establishments avert conflict of interest involving personal interests and the company by
establishing a code of ethics and or company policies that disallows extraprofessional dealings
within the company. Prohibiting such dealings or relationships greatly cuts down the possibility of
conflict of interest arising (Tricker, 2012, p.29–33). The company codes of conduct cover the issues
indicated in the illustration

Marriott Essay
1. Project Chariot involves a conflict of interests. Describe this conflict, who it is between, and who
stand to gain or lose from this project.
The conflict of interest exists between the shareholders and the bondholders. After Project Chariot is
implemented, MII will be of low debt level and HMC will be with high debt. The original
bondholders will be tied to risky real estate assets with uncertain appreciation and expected income.
Shareholders will gain and bondholders will lose, since splitting the company in two will give
shareholders the business upside and bondholders the real–estate downside.
2. In the lecture, we saw a number of different conflicts of interest. Which of these is this project
most similar to?
The risk ... Show more content on Helpwriting.net ...
We prefer the "shareholder view". Because the responsibility of management team is to maximize
shareholder's wealth. The debt holders can protect their interests through covenants, although those
protection clauses are not written into covenants in this case. When debt holders buy the bonds, they
should have already taken the scenario of dropping below investment grade into consideration when
they buy the bonds. Also, although some institutional holders have to sell the bonds after them
dropping below investment grades, that's their own rule/policy, which should not have any impacts
on Marriott management team's decision making.
The transaction is consistent with management responsibilities. Because:
First, the Chariot project give MII opportunity to invest in more profitable opportunities, since it can
maintain investment grade without old debt burden and could access the capital market by
borrowing with lower cost. Second, this Chariot transaction gives shareholders a better opportunity
to benefit from the firm's upside potential. In brief, although in short term shareholders may suffer a
small loss due to the waste of tax credit generated from HMC's operating loss, the shareholders can
benefit in long–term with MII's investment in more profitable project and HMC's properties value
appreciation.
Third, if management doesn't do this Chariot transaction, the entire Marriott may enter a "vicious
cycle", i.e., the firm stuck in the not

Duty Of A Service Relationship
Fiduciary duty is a service relationship whereby the individual that owes the duty or the trust, such
as the board of directors to the individual empowering the trust, such as the shareholder, performs a
service. The board of directors carry out the services to the best of their ability on behalf of the
individuals empowering them with that authority. Directors or board member's responsibilities are to
be aware not only of the Witten laws– statutes, thing that they are responsible for but also to
unwritten law– precedent and their duties. These duties are: duties of care, diligence, obedience,
loyalty and so on. Fiduciary duty or duty of care is exercising a judgement that is reasonable an
important person would exhibit and process of ... Show more content on Helpwriting.net ...
Duty of loyalty is important for the survival of an organization and its stakeholders. For example,
the director of a company when issuing shares to the public creates an obligation in the part of the
company to the shareholders. The directors of a company by using the shareholders' investment
must make sure that he/she does not create any conflict of interests between the company objectives,
the shareholders, the managers and all the staff. Using the shareholders' money to create an
economic benefit to the directors only is considered to be a breach of fiduciary duties. In contrast,
the directors must act in the best interest of the company and the shareholders.
While performing its duties and responsibilities, directors and executives must also respect and be
obedient to the organisation, its mission, by laws and policies as well as honouring all terms and
conditions of other standards that will be appropriate such as laws, rules and regulations. This forms
part of the duty of compliance.
Moreover, directors have Duty to manage Accounts. The board members are responsible for the
charities, financial stability and accountability. they do this by primarily establishing procedures to
keep the organisation operating in a fiscal manner. Board members are obligated to honour the
standards with regard to all decisions and actions.
Furthermore, Due Diligence is the care that a reasonable person exercises under the circumstanced
to avoid harm to other persons on their

Fiduciary Relationship Essay
I. Question 1
Courts have identified two categories of fiduciary relationships: The first is "inherently fiduciary"
and the second is "fact–based". The circumstances in which a fiduciary relationship would arise
include:
A. Undertaking of trust and confidence
Mostly, fiduciary relationships involve an agreement where one party accepts from another on trust,
the exercise of a power or discretion over his or her interests. The agreement does not need to be
contractual. The key criterion is whether 'one party is reasonably entitled to repose and does repose
trust and confidence in another'. That is when any particular aspect of the agreement gives rise to an
obligation of loyalty, beyond the contractual terms.
B. Vulnerability
Often a ... Show more content on Helpwriting.net ...
Moreover, a fiduciary relationship does not arise where one of the parties has failed to protect
himself adequately. However, Mason J (dissent) found there was a limited fiduciary relationship.
Although HPI was entitled to act in its own interests, it is not inconsistent with a fiduciary
relationship if there is also an obligation to act in another's interests.
In contrast, the NZSC in Chrinside v Fay [2006] unanimously held the parties in a joint venture
owed each other fiduciary duties. A joint venture with a view of sharing the profit is inherently
fiduciary per Elias CJ. Further, when a joint venture had sufficiently advanced beyond mere
discussion of possibilities to making plan, costing and implementing, it does amount to a
relationship of fiduciary per Gault J. Moreover, most joint venture relationships can properly be
regarded as being inherently fiduciary because of the analogy with partnerships per Tipping and
Blanchard JJ. The key point is whether the relationship entitled one party to repose trust and
confidence in the other party.
In my view the New Zealand Supreme Court's approach is more convincing.
III. Question 3
There is a presumptive requirement that once a breach of fiduciary duty has been established the
errant fiduciary must disgorge all profits made by dint of the breach. There are two main exceptions
to that rule. First is where there has been some antecedent agreement for profit

Defining The Three Different Ways That You Can Organize...
a. Define the three different ways that you can organize your new business. Given the above facts,
please provide one advantage and one disadvantage with respect to each type of business
organization and then choose a business structure for your new venture; explain why you chose the
way you did. (10 marks)
There are essentially three major types of business organizations:
Sole Proprietorship: A business which involves an individual carrying on business alone, the
business is the sole responsibility of one person, the owner. An advantage of running a business as a
sole proprietor is that the owner has complete control and decision making power over the business.
A disadvantage however is that the sole proprietor is held personally liable ... Show more content on
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I choose to start cooperation because it is a separate legal entity, separate from the people who own,
control and manage it; by registering my business as cooperation I will not personally be
responsible for the corporation's debts.
b.Based upon the business organization that you chose, how are you going to raise the funds to
finance the business? Also, please describe what the provider of funds will receive in exchange for
these funds. (10 marks)
Since I have estimated that I will need $1,000,000 to finance my business I have to now think of
how I am going to raise this capital, the different ways to raise capital, would fall under two
categories – equity and debt financing. I will begin to sell ownership shares of my business by
approaching investors, I already have a friend who has informed me that she would be interested in
my venture and would be willing to invest $100,000 in my business, I have my family too that has
pledged to help me financially. I can ask them to become equity investors in my business; I could
offer them a share in the ownership of my business. Depending on the success of my company I
could agree to issue dividends to them too. Various governments also give out loans to new
businesses, called small business loans to encourage new

Westpac Case Summary
a whole. This was based on an precedent from a 1970 case law in which it was held that a director
of a group of company is not in breach of his fiduciary duty if the decision was based on what a
reasonable person could consider to be an act that was in the best interest of all companies in the
group. Case law has also shown that in situations where the interest of the company and the creditor
coincides, it is legitimate for the director to consider the interests of the creditors first . However,
with evidence from the fact that the director involved in the Equiticorp case was able to invoke "best
interest of the group" claim 17 years after the case law obliging directors to consider creditors
interest first shows that the entity model is still applicable in Australian law . Apparently this leads
to very harsh rulings for creditors in these insolvency situations. This means that Equiticorp's ruling
diminishes the only hope of applying and enforcing Walker V Wimborne as a standard to obligate
directors to put creditors' needs ... Show more content on Helpwriting.net ...
A case in point is the Westpac v The Bell Group . In the Westpac case, directors facing liquidation in
1990 sought to get a bailout on the basis of assets that were legally for creditors of the company
after the 1990 insolvency. However, in 1991, the directors sought a different bailout with these
assets that were due to be confiscated. A restructuring was attempted but it failed and the providers
of the bailout sought to sue for the assets used as collateral for the bailout. This was dragged through
several years of legal proceedings and it became apparent in 2013 (12 years afterwards) that the
claim was not recoverable. This shows that the enterprise model comes with grey areas that could be
exploited by reckless directors to cause further complications for potential creditors at the verge of a
fold

Yahoo Corporate Governance in Microsoft Takeover
Yahoo Corporate Governance and the Microsoft Takeover We are studying the potential buyout of
Yahoo by Microsoft from the perspective of Yahoo's Board of Directors. Yahoo! Inc. provides
Internet services to users, advertisers, publishers and developers worldwide. It offers online
properties and services to users; and marketing solutions and tools to advertisers and publishers. For
example, Yahoo! Finance is a portal for information on general financial conditions and specific
firm information. It is also the second largest internet search engine on the planet, behind Google,
which is also their main competitor. Jerry Yang, 39, is Co–Founder, CEO, Chief Yahoo! and
Executive Director and Susan L. Decker, 45, is President. Yahoo!, a ... Show more content on
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For the past few years, Microsoft Corporation, the software behemoth located in Redmond
Washington, has been looking to acquire Yahoo!, Inc. While Microsoft Corp. has numerous reasons
to be interested in acquiring Yahoo!, there are few options available for Yahoo! Inc. Like Google's
purchase of Double–Click in 2007, Microsoft sees Yahoo! as a way to extract internet advertising
revenue. Further, Microsoft has for years sought to build a winning portal that could dominate the
search engine market, currently dominated by Google. MSN was Microsoft's version of AOL. Even
after years of Research &Development in this area, Microsoft still only has 19% of the internet
search engine market (and that's because of ISP bundling and desktop default presets.) Actual search
engine use of MSN is much lower than 19%. Google is a money–maker and has a dominating
market share. Beyond the search engine market, there also is that "innovation" nirvana for which
Microsoft is always searching. It wasn't Hotmail, it wasn't MSN maps, it wasn't SoapBox, and the
list of Microsoft Corp. disappointments goes on. Now they decided to go for a big acquisition.
Microsoft's original unsolicited offer of $44.6 billion for a complete buyout of Yahoo! Was rejected
by Yahoo!'s board. Microsoft has continued to revise their bids, increasing it to $47.5B to no avail.
This initial bid was $31 per share a 62% premium for

Non-Consensual Property Rights
Non–Consensual Property Rights
Some form of classification is necessary to aid attempts to bring order to a confusing and confused
area of law. If the events from which non–consensual property rights arise can be classified, then the
law's response is more likely to be consistent and coherent. Yet there are problems. The very nature
of the facts that are brought before courts in the sorts of cases that comprise this area of law demand
fairness, and legal policy considerations lurk behind every rationalisation. This makes it more
difficult to achieve coherence, but our task is less demanding than achieving coherence in the law:
we only need to look at the sets of facts that give rise to property ... Show more content on
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He and one of the beneficiaries told the other beneficiaries that the best way to realize the value of
the shares would be to make a takeover bid. In the end, Mr Boardman made such a bid, successfully,
in his personal capacity. However, this became an event giving rise to non–consensual property
rights, a wrong, because he only gained the opportunity to do this and the information necessary
while purportedly (or actually) acting in the capacity of adviser to the trustees. Mr Boardman did
not act dishonestly in the sense that he deliberately set out to deceive the beneficiaries. After his
actions they effectively 'doubled their money'. Viscount Dilhorne, who dissented, was prepared to
hold that the authority of Regal v Gulliver (a case with similar facts which he distinguished on the
ground that there the fiduciary held assets originally belonging to the trust which wasn't the case in
Boardman) required 'wrongdoing' which was absent in the case before him because the trust had not
suffered a loss. The reasoning of the majority did indeed beget a strict rule; that an agent is liable to
account for profits he makes out of trust property if there is a possibility (my italics) of conflict
between his interest and his duty to the principal (Lord Cohen).
AG for Hong Kong v Reid

The Collapse And Failure Of Enron
Introduction
Mentioning the name Enron to scholars and practitioners in accounting will always shift their
thoughts to ethical accounting practices. This owes to the fact that the failure of organizations like
Enron, WorldCom and Adelphia, led to changes in the standards of practice in accounting.
Consequently, several authors completed studies on the collapse and demise of Enron. For instance,
Moncarz et al., (2006), Cunningham and Harris (2006), and Dembiski et al., (2006) made
publications on the topic in question. According to Moncarz et al., (2006) Enron's failure represents
the biggest company failure in the history of America. This is highlighted by the fact that Enron had
revenue of US $101 billion and an estimated size of 21000 employees by 2000. However, Dembiski
et al., (2006) reveals that the organization collapsed in 2001 owing to unethical accounting practices
within the organization. This paper discusses how Enron led to increased emphasis on corporate
codes of conduct by analyzing the ... Show more content on Helpwriting.net ...
This was possible because the organization created elastic pricing structures using financial
derivatives to manage risks. As a result, the model used by Enron assumed continuous growth
owing to its diversification from an energy firm to a hybrid business that focused on energy and
financial derivatives. It follows this was the main source of success (managing risks using complex
financial techniques). Nonetheless, the organization collapsed because of using unethical accounting
practices in addition to using complex financial instruments. The failure of the Enron could also be
attributed to its corporate culture. As Cunningham and Harris (2006) argue, Enron's corporate
culture also contributed to its failure because the organization embraced innovation and
competitiveness. Thus, the organization encouraged experiments and discouraged

Dynamic Development Ltd's Case: Dynamic Development Plc
Section A Question 2 Introduction The current case demonstrates two profound problems closely
related to the directors' duties, which Dynamic Development plc has to deal with, i.e. (i) directors
(Charles and Beatrice) entering into competing business and (ii) failure to supervise and produce an
inaccurate financial account and statement (Charles). Director's duties Arthur, Beatrice and Charles
are the de jure directors of Dynamic Developmenet plc, though they do not hold any shares in the
company, they owe directors' duties to the company, but not to the shareholder individually
(Percival v Wright), and company as a whole was taken to mean the 'corporators as a general body',
i.e. the shareholders (Greenhalgh). No–conflict rule In accepting ... Show more content on
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Hence, it may be difficult to find people who are willing to serve on the board as directors.
Meanwhile, the traditional approach, where held by Romer J in Re City Equitable Fire Insurance,
was considered as 'lax' as argued by Hudson 'such approach was only appropriate at the time when
directors are merely symbolic figures', The contextual approach would be preferred to the other two,
as whether duty of supervision should be imposed should depend on the circumstances, as there
should be limits to the extent of supervision that can be undertaken. It would take account into the
kind of business, size of company, nature and extent of delegation and skills of the director in
question. Such comprehensive approach would provide a purely objective assessment of directors'
conduct and it would assist the court in determining whether Charles had breached the statutory
duty in a comprehensive

Advising Directors Of Flyaway Pty Ltd
I have been asked to advise directors of Flyaway Pty Ltd on the following issues:
Whether Peter and Paul breached their duty of care and diligence as directors when they were not
present for the decision to borrow $10 million from Citibank.
Whether John breached his fiduciary duty as a director when he invested in Speed Bullet Pty Ltd.
Whether board of directors is obliged to follow the resolution passed by the shareholders at the
general meeting.
Whether Peter and Paul breached their duty of care and diligence as directors when they were not
present for the decision to borrow $10 million from Citibank.
A director has a duty of care and diligence in to the company. The Corporations Act of Australia
(2001) states that:
A corporation's director or officer shall use their powers and carry out their functions with the
degree of care and diligence that a reasonable person would exercise if they:
(a) were a director or officer of a company in the company's circumstances; and
(b) occupied the office held by, and had the same obligations within of the company as, the
executive or officer . A director is obligated to place himself or herself to manage the company . The
director must understand the business of the company and the effect that the decisions of the board
has on the company. Where the decisions of the company rely on expert or professional advice, then
the directors of the company can reply on such advice. There has been a series of cases, which
examine

Lindsay Case
Lindsay is asking to inspect financial documents for two separate legal entities, and she has
differing roles in both of the companies. Lindsay's role in the LLC is a co–partner role. Thus, she
could inspect the financial documents of LLC; however, she has dissociated. Dissociation "occurs
when a partner ceases to be associated with the carrying on of the partnership business" and
terminates his or her actual authority to act for the partnership and to participate in running the
business" (259). In 2007, Lindsay leaves the company, which means she has voluntarily withdrawn
and completely abandoned her duties. If Lindsay had returned a month or several months later, than
she could argue that she never really disassociated; however, she chose ... Show more content on
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Lindsay has signed that the "business (LLC) will be run through the corporation." Therefore,
whatever will be done to the LLC will directly affect the corporation, and her decisions are not only
decisions of a copartner, but also decisions of a fellow director. Since she is making a decision
involving the corporation, a "majority of the board of directors must be present to constitute a
quorum" in order to vote on issues affecting the corporation (269). In order to undo the corporation,
Lindsay needs the majority vote of the

Types Of Proprietary Funds Or General Fund Vance County
Addition to the Governmental Funds or General Fund Vance County has one type Proprietary Funds
– Enterprise Funds which are used to report the same functions presented as business–type activities
in the government–wide financial statements. The County uses enterprise funds to account for its
water activity and for its solid waste management operations (Department, June 30, 2015). The
County's proprietary funds provide the same type of information found in the government–wide
statements but in more detail. Total net position of the Solid Waste Fund at the end of the fiscal year
was $751,736, and for the Water Fund equaled $1,662,088. The change in net position before prior
period adjustments for the Solid Waste Fund was $20,513 while the change in net position before
prior period adjustments for the Water Fund was $1,610,863 (Department, June 30, 2015). Granville
County has two types of Proprietary Funds Enterprise Fund which is very similar to Vance County
except in Granville County their unrestricted net position of the Solid Waste Fund equaled
$(7,658,465) (Department, June 30, 2015). The total net position for all proprietary funds is
$(1,948,415). The total change in net position for the proprietary funds was a decrease of $103,579
(Department, June 30, 2015). This change in net position primarily results from decreased non–
current liabilities for post closure care costs resulting from legislative changes and increased
personnel costs.
Granville County's second

Fiduciary Acceptance Definition
The fiduciary administration is the responsibility of the trustee for managing the trust property. The
trustee has "all of the powers over trust property that a legally competent, unmarried individual has
with respect to individually owned property." But it is the beneficiaries, not the trustee, that bear the
consequences of the trustee's exercise of these powers. Meanwhile, by making a transfer in
testamentary trust rather than outright leave them to their heirs, a settlor ensures that the property
will be managed and distributed in accordance with his wishes which expressed in the terms of the
trust rather than the whims of the beneficiaries. A testamentary trust also allows the settlor to
empower the trustee to decide how the trust property ... Show more content on Helpwriting.net ...
From the view above, beneficiaries may bear high risk for the consequences of intentionally or
negligently improper actions of trustee. So there must be some measures to protect the beneficiaries
from mismanagement or misappropriation by the trustee. In deciding whether and how to exercise
the powers of the trusteeship, the trustee is subject to and must act in accordance with the trustee's
fiduciary duties. The fiduciary duties come from the law of fiduciary administration, whose purpose
is to induce the trustee to adhere to the terms of the trust and to act prudently and in the best
interests of the beneficiaries. Trustees are subject to overarching fiduciary duties of loyalty and
prudence. The fiduciary duties are the highest standard of care, at the same time, trustees have to be
subject to a host of subsidiary duties, such as keeping adequate records and disclosing information
about the trust to the beneficiaries. If trustee breaches the fiduciary duties, he or she may be
removed from office, and need to account for the ill–gotten profit. The beneficiaries are entitled to
damages, even if they suffered no

Daniel Katz Case
Subsections (a)(1), (a)(2), (b)(4), (b)(5), and (d) of ET § 17–113, all illustrate that an agent's primary
obligation to a principal under a power of attorney is to act in the best interest of the principal, i.e.,
Daniel Katz. Id. Were this a motion for summary judgment Martin would easily show that he has
acted constant with his obligations under ET § 17–113, but such is not the question here. Rather, the
material question in this matter is whether plaintiffs have pleaded facts sufficient to show that
Martin has acted inconsistent with his duties under ET § 17–113.
In paragraphs 35, 36, 37, and 42, plaintiffs provide an exhaustive list of demands that Lauren and
Rifkin feel are owed to them from Daniel's assets. These self–serving–and frankly, quite
concerning–assertions fundamentally misapprehend the nature of the fiduciary relationship at issue
here. In this matter, Martin owes no duties to Lauren or Rifkin. Rather, pursuant to the power of
attorney, Martin only owes fiduciary obligations to Daniel to provide for his best interest, as Daniel–
and no one else–is the principal. Indeed, plaintiffs' complaint is full of allegations ... Show more
content on Helpwriting.net ...
of Teamsters v. Willis Corroon Corp., 369 Md. 724, 727 n.1 (2002); Kann v. Kann, 344 Md. 689,
693 (1997) ("[A]llegations of breach of fiduciary duty, in and of themselves, do not give rise to an
omnibus or generic cause of action at law that is assertable against all fiduciaries."). Fiduciary
obligations may surely arise by means of contract, the imposition of a duty in tort, or some other
sort of relationship, and when they do, "[c]ounsel are required to identify the particular fiduciary
relationship involved, identify how it was breached, consider the remedies available, and select
those remedies appropriate to the client's problem." Kann, 344 Md. at

Hypothetical Case: Breach Of Fiduciary Relations
CIA 1
COMPANY LAW 2 submitted by Akshya Prakash
1216067
6BA LLB A
In this hypothetical case the main issues dealt with are
1. Breach of fiduciary duty
A fiduciary relationship is mainly the idea of faith and confidence and is established when another
person accepts the confidence given by one person. The duty of a fiduciary includes loyalty and
reasonable care by the person in custody. All the fiduciary actions are performed for the advantage
of the beneficiary.
As a separate legal entity or juristic person which exists apart from its
Management and shareholders, a company must necessarily act through individuals. The functions
and responsibilities of corporate directors, who are entrusted with its management, arise by virtue of
this nature of a company. Company management can only be effective if those who manage are
allowed a certain measure of freedom and discretion in the exercise of their function. Contrarily,
effective control of management is vital in the interests of the company itself and its various
stakeholders.
As fiduciaries directors must not place themselves in a position in which there is a conflict between
... Show more content on Helpwriting.net ...
3. Breach Duty to disclose
In the case there is clear breach of duty when the shareholders of problem partially owns the shares
of the problematic and suring the time of the resolution the problematic did not disclose the
resolution that was been passed and that there was one director who voted against the strategy and
they didn't try to look into the criticism of the resolution where they just focused on one aspect of
the business.
Directors will be in breach of duties of care and perhaps loyalty if they take no or inadequate steps,
but such conclusion would require analysis of the other director's action (or in action) under the
principles.
4. Breach of statutory

The Conflict Of Fiduciary Duty
Question A: SUCCESSIVE CONFLICT Fiduciary Duty Practitioners must not accept a retainer in
any action against a former client or someone from whom they have obtained confidential and
material information and it is reasonable to conclude that there is a real possibility the information
will be used to the persons detriment. There was no retainer between Virginia and Teddy, but a duty
of confidentiality could still apply in equity if the information was believed to be confidential or in a
lawyer–client relationship. Because of the informal social setting and lack of detailed information
exchanged, it is likely that Virginia does not owe Teddy a fiduciary duty or duty of confidence. If
Virginia does owe Teddy a fiduciary duty, the onus of proof is on Teddy to show whether she has
confidential information, whether that information is relevant to the new matter and whether it is
reasonable for Teddy to conclude that there is a real risk that the information will be used to his
detriment. Next, the onus shifts to whether information screening can appropriately protect the firm.
Breach of confidence in equity requires confidential information that has the necessary quality of
confidence, imparted in circumstances importing an obligation of confidence, not otherwise
required by law or in the public interest. The objective test for judicial intervention is whether a
reasonable observer would perceive a real possibility of misuse of confidential information. Courts
will

Case Study : Park Condominium Association
Please be advised that this firm represents the Hillcrest on the Park Condominium Association (the
"Association"). We are in receipt of your letter of July 20, 2015 to TH Management Consultants,
LLC (hereinafter "TH Management") and Nancy Grebe's e–mail of August 3, 2015, with a proposed
letter she intends to send to the co–owners. As an initial matter, you should be advised that the
"Steering Committee for the existing Co–owners of Hillcrest on the Park Condominium"
(hereinafter the "Steering Committee") has no legal authority to govern the Hillcrest on the Park
Condominium. Specifically, MCL 559.103(4) defines a condominium association as follows: (4)
"Association of co–owners" means the person designated in the condominium documents to
administer the condominium project. Article III, Section 2 of the Master Deed for Hillcrest on the
Park provides the Association with the following powers: Section 2. Association....is the non–profit
corporation organized under Michigan law of which all Co–owners shall be members, which
corporation shall administer, operate, manage and maintain the Condominium. Any action required
of or permitted to the Association shall be exercisable by its Board of Directors unless specifically
reserved to its members by the Condominium Documents of the laws of the State of Michigan.
(emphasis added) Article I of the Bylaws of Hillcrest on the Park provides in pertinent part: Hillcrest
on the Park, a residential Condominium Project located in

Hiihhi
overnment–wide Statements. What are the titles of the two government–wide statements? Are total
assets larger for governmental activities or business–type activities? Which function or program has
the highest net cost? What kinds of general revenues are available to cover the net cost of
governmental activities? Were business–type activities "profitable"? That is, is the excess of
revenues over expenses positive? Are there any component units that are discretely pre– sented as a
column on the government–wide financial statements? b. General Fund. What title is given to the
fund that functions as the General Fund of the reporting entity? Does the report state the basis of
accounting used for the General Fund? What types of assets ... Show more content on
Helpwriting.net ...
Do the financial statements provide evidence as to what basis of accounting these funds use? f.
Notes to the Financial Statements. Read the notes to the financial statements so that you can refer to
them as needed in subsequent chapters. What sig– nificant accounting policies are discussed in the
first note? Does the note describe the entities that are included as component units? Does it list enti–
ties that are not considered component units? Are there any notes that dis– close (1) any material
violations of legal provisions, (2) deficit fund balances or net position, or (3) significant
commitments or contingencies? overnment–wide Statements. What are the titles of the two
government–wide statements? Are total assets larger for governmental activities or business–type
activities? Which function or program has the highest net cost? What kinds of general revenues are
available to cover the net cost of governmental activities? Were business–type activities
"profitable"? That is, is the excess of revenues over expenses positive? Are there any component
units that are discretely pre– sented as a column on the government–wide financial statements? b.
General Fund. What title is given to the fund that functions as the General Fund of the reporting
entity? Does the report state the basis of accounting used for the General Fund? What types of assets

The Business Judgment Rule: A Balance of Two Concepts
A. The accountability Concept Academics have made numerous propositions that would modify
shareholders derivative suites by switching the balance more in the direction of accountability. The
most impressive case is Professor Gevurtz suggestion to eradicate the business judgment rule . He
analyzed the different formation methods that courts had established to the rule, his findings on the
business judgment rule different explanation can be summarized in two classifications . He
described the first class as " meaningless" by considering that it alludes to directors walking free of
the result of their decision except if there is a reason to hold them accountable, For instance, if they
breach fiduciary duty or the duty of loyalty . He labeled the second class as "Misguided" because it
creates a distinctive standard of accountability –gross negligence– for asserted breach of the
obligation of care that vary from the usual tort law . The professor reached the conclusion that court
should put the usual negligence standard into practice concerning directors' action . He advised for
the elimination of the business judgment rule, because it has a restricted effectiveness and high
possibility for mischief . Other academics promoted a slightly different approach form Professor
Gevurtz, suggesting an inclusive judicial inspection of decisions via numerous enlargements of the
fiduciary duty. Thus changing the exercise of the business judgment rule. For example, some
academics

Directors ' Duties And Company Law
Directors' Duties and Company Law
Introduction
A managing/ executive director is the chief day–to–day manager of the company's affairs who is
directly involved in the management of the company. A company on the other hand, is a voluntary
association of person formed for doing some business and can be either public or private. Law
according to (Gates 2002) is the set of rules that guides our conduct in society, is enforceable
through public agencies, and obeyed because of the belief that they are right or rather for the desire
of approval from others. Company Law is therefore, rules relating to the formation of companies
and in China, it is generally accepted for it has played an important role in restructuring State –
owned enterprises and in improving the business environment. (Gu, 2010). (Mangal 1995) purports
that, Company Law has grown substantially in volume , coverage and complexity over the years and
success consolidations and amendments have sought to increase the protection of investors and
persons who deal with companies. Breach of duty is therefore breaking the Company Law. Simone's
Breaches of Director's Duties and Defences
To whom does Simone owe duties?
Directors according to (Baxt et al 2005), owe a fiduciary duty to the company. They say fiduciary
according to the High Court of Australia is the duty to act honestly, in good faith, and to the best of
the directors' ability in the interests of the company. In this context they note, the director must not
allow

Responsibilities for Offerings of Securities
WARDLAW, Circuit Judge:
J. Thomas Talbot, a member of the board of directors of Fidelity National Financial, Inc., a
Delaware corporation, traded on confidential information about the impending acquisition of
LendingTree, Inc., which he received in his capacity as a Fidelity director. We must decide whether
Talbot can be held liable under § 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), 15
U.S.C. § 78j(b), and Rule 10b–5, 17 C.F.R. § 240.10b–5, promulgated thereunder, for
misappropriating information from Fidelity, in the absence of a fiduciary duty of confidentiality
owed to LendingTree by Fidelity or Talbot when he executed the trades. We hold that Talbot can be
held liable, under the circumstances here, but that a ... Show more content on Helpwriting.net ...
Make sure you don't do anything with the stock." Thompson said this "plenty loud. It was loud
enough to hear him." All Board members present at the meeting, except for Talbot, considered the
LendingTree information to be confidential.
Various directors testified at depositions to their understanding of how far along the negotiations had
proceeded between LendingTree and the unnamed acquirer, as conveyed by Foley: "far along, and it
would be announced as a deal shortly thereafter" (Thompson); "advanced discussions" (Bickett);
and that "it looked like there was going to be a transaction" (Christensen). Talbot interpreted Foley's
words as far less definite, understanding the information about LendingTree to be a "rumor," not a
"factual statement." Talbot wrote "LENDING TREE" at the top of his copy of the meeting agenda;
those were the only notes he took during the meeting.
On April 24, 2003, two days after the meeting, Talbot purchased on margin 5000 shares of
LendingTree at approximately $13.50 per share for a total of $67,500. Talbot testified that Foley's
comments at [ 530 F.3d 1089 ] |
the April 22, 2003 regarding LendingTree "triggered [his] conduct on April 23rd to look into
[LendingTree] more carefully." A number of factors influenced his decision to purchase the stock:
Fidelity had invested in it; it was a real estate company,

Responsibilities And Responsibilities Of Fiduciary...
it might be said:
I INTRODUCTION
In Australia, the doctor and patient relationship does not fall within an established category of
fiduciary duty. The High Court in its decisions has been unwilling to alter equity's principles in a
manner that would allow fiduciary obligations to be imposed upon doctor and patient relationships.
In order to understand the High Court's unwillingness, this essay will examine and discuss the
established categories of fiduciary relationships, fiduciary relations outside of the established
categories and the nature of fiduciary obligations in terms of prohibitive (negative) and prescriptive
(positive) duties and existing common law duties.
II DISCUSSION
A Fiduciary Obligations and the Established ... Show more content on Helpwriting.net ...
However, when one considers the primary role of a doctor, it seems much more suitable to describe
their duty as relating to 'the exercise of reasonable care and skill in the provision of professional
advice and treatment'.
At first glance, it is easy to see how even this could be perceived to be fiduciary in nature, whereby
patients often confide in and depend on their doctor who they believe will act in their best interests.
Even so, there is a major difference between the doctor–patient relationship and the established
fiduciary relationships.
In established fiduciary relationships the fiduciary acts like 'a representative character in the
exercise of his responsibility'. When considering the role of doctors generally, it cannot be said that
the role of doctors is to act as the representatives of their patients. As such, the High Court in Breen
v Williams determined that it would not impose fiduciary obligations between doctor and patient
since traditionally there was no such established relationship in Australian law.
B Fiduciary Relations Outside the Established Categories
In spite of this, it should be noted that 'the categories of fiduciary relationship are not closed' and the
courts' powers may be extended, so as to be able to find a fiduciary relationship outside the
established categories. The finding of a fiduciary relationship in such circumstances will be based
on the factual

Workmen's Auto Insurance Company V. Guy Carpenter, Inc.
Are Insurance Brokers & Agents Fiduciaries?
Insurers, insureds, and even their attorneys frequently incorrectly assume that insurance agents and
brokers owe fiduciary duties to their insureds. While the law is not completely clear regarding the
applicability of agency principles and their fiduciary duties in this area, legal precedent can offer
some guidance on the issue. Currently, there is no appellate precedent permitting an insured to sue
its agent or broker under a common law action for breach of fiduciary duty. However, the California
courts have yet to be willing to rule that the cause of action based on common law agency principles
is completely inapplicable to brokers and agents.
Demonstrative of the Court's unwillingness to create a bright–line rule is the heavily litigated case
of Workmen's Auto Insurance Company v. Guy Carpenter & Co., Inc. In 2011, the Court of Appeal
in Workmen's answered the question regarding fiduciary duties of brokers and agents definitively in
the negative, ruling that "an insurance broker cannot be sued for breach of fiduciary duty." The
ruling finally provided the guidance and rule necessary to put the issue to rest. However, the relief
was short lived when in 2012, after a rehearing that affirmed the Court's ruling, the opinion was
vacated and depublished, again leaving the law in this area without ... Show more content on
Helpwriting.net ...
Prudential Property & Casualty Insurance Company that the insurer–insured relationship "is not a
true 'fiduciary relationship' in the same sense as the relationship between trustee and beneficiary, or
attorney and client." The Court went on to state that any special or additional duties applicable to the
broker or agent were only the result of the unique nature of the insurance contract, and "not because
the insurer is a fiduciary." The Court in Hydromill applied the concept in Vu, finding that if an
insurer does not owe fiduciary duties, then a broker and agent could

Definition Of Lifting The Corporate Veil
PART B Is the protection provided by the corporate veil is justifiable and adequate? There is no
clear framework of the rules that would cover the contingencies of a ruling to pierce the corporate
veil Idoport Pty Ltd v National Australia Bank Ltd. The corporate Veil usually protects owners and
shareholders from being held liable for corporate duties. Yet again a decision made by the court to
lift that veil and would place the liability on shareholders, owners, administrators, executives and
officers of the company without ownership interest. The purpose of this essay is to conduct an
analysis on the concept of lifting the corporate veil and to review the different views on its fairness
and equitability to present a better understanding of the notion, the methods used was throughout
researching the numerous scholars views on the subject, case law and statutes examples, and the
evidence provided by the empirical study of Ramsay & Noakes. When we discuss the lifting the
corporate veil the first case that pops out is the case of Salomon V A. Salomon & Co Ltd, since the
decisions of applying the corporate veil were first formed as a consequence of this case. The idea
covers all of company law and distinguishes that a company is a separate legal entity from its
members and directors. Furthermore, spencer (2012); have indicated that one of the core principles
that followed the decision in Salomon v Salomon was the wide acceptance one man company's.
However In order to form a

The Regulation Of Provided Legal Services
Introduction
The regulation of provided legal services is imperative towards the functionality of the justice
system. As indicated by Sir David Clementi regulation fulfills six distinctive purposes of which
incorporates access to justice, protection and advancement of consumer interest, promotion of
competition, public understanding of a native 's legitimate rights and the maintenance of the rule of
law.
The SRA Code of Conduct represents an ambitious attempt to merge consumer protection and
professionalism. As it stands, the regulatory framework of the legal profession was established by
the Legal Services Act, 2007 . Further to this, section 12 of the legislation outlines six legal
activities that may only be executed by authorized ... Show more content on Helpwriting.net ...
Secondly, the SRA protects consumer interest and offers consultation with the public and
professionals to ensure that standards are met. The SRA Code of Conduct 2011 is a subordinate
enactment in that its formulation requires Parliament's approval.
It would appear that the SRA Codes are based on the approach of risk–based regulation. It is critical
therefore to comprehend what risk implies in this specific circumstance. Despite its common usage,
risk–based regulation is utilized in numerous disciplines for a variation of meanings. In this context,
risk – based regulation is figuring out if a certain action should be controlled or to what degree
safeguard measures firms should adhere to. Furthermore, the risk based approach taken by the SRA
has two steps which are impact and probability of the risk.
Perhaps a serious shortcoming with this approach is the inability to evaluate both steps lacking
sufficient data. For instance, the SRA might notice a new kind of fraud emerging but the
organization's knowledge of such impact is limited. If a risk is hard to measure, it is frequently said
to be 'instability' instead of 'risk '. Therefore, the SRA manages risk that is mostly "instabilities" in a
technical sense.
It is reasonable to question to what extent does the SRA Codes deal with risk and the association
between risk and ethics in relation to those codes. One aspect of a risk based approach is
exemplified by way of the implementation of the Solicitors' Code

The Lease And Marketing Plan
uestion1
a) Issue1: who are promoters in Butterfly's case?
The lease and marketing plan failed to expand office space and attract new clients, Butterfly had
cash flow problems and sold to Xco Ltd, Consequently, Butterfly can sue promoters for the
recession of the contracts or damages. In this case, there is five person involved–John, Paula,
George, Robyn and Brian. Generally, Emma Silver Mining 's case defines a person who is involved
in the creation of a new company is a promoter. John, Paula, George and Robyn undertook mining
project, shared the rental cost and sometimes referred clients, i.e.: they are promoters as they took
active parts in the formation of a company and generated the necessary share capital to carry on
business. For Brian, an accountant providing tax service, does not act purely in his professional
captivity and he agreed to purchase some non–voting shares of Butterfly. This makes him take an
inactive position in Butterfly but can receive dividends. The similar facts in Mandalay's case, RSC
leaves the project to Mandalay and also gets profit from the operation, therefore Brian is a promoter,
too. In summary, John, Paula, George, Robyn and Brian, as Butterfly's promoters, automatically
establish a fiduciary relationship with Butterfly.
Issue 2: do promoters owe fiduciary duties to Butterfly? If breached fiduciary duties, who will be
liable for entering into the lease and marketing contracts?
In this case, Robyn and George signed agreements with third

Does Directors Have Fiduciary Duties?
Does directors have fiduciary duties to creditors?
Shareholder primacy theory seems not support the viewpoint that shareholders owed exclusive
fiduciary duties by directors, then, other constituencies like creditors, employees and suppliers,
should directors owe fiduciary duties to them? Schwarcz indicates that when the company is
insolvency or the company want to have some high risk ventures, the company can only rely on
creditors' money. On this occasion, creditors substitute for shareholders and become the residual
claimant of the company. Hence, the following part will take creditors as an example, to illustrate
that in some special situations, directors should take creditors' interests into consideration through
the contractarian approach.
The main theory of contractarian approach is that all the people in the company are in the voluntary
contract–based relationship. This kind of voluntary contract–based relationship entitled every parties
of the contracts the rights to negotiate with each other and to reach an agreement to some specific
items. This approach come up with two arguments to argue that creditors are unnecessary to owed
fiduciary duties by directors, which are one, from the efficiency perspective, and another one is
from the other protect mechanisms perspective.
First, when it comes to the importance of efficiency, no one can describe better than the professor
Gillian Hadfield, who said that efficiency is the "bedrock of gold " of the capital market,

Fiduciary Relationships In Texas
There are some business relationships in Texas, and elsewhere, which may impose legal
requirements of care and loyalty. These requirements may be referred to as a fiduciary duty.
According to the Cornell University Law School's Legal Information Institute, a fiduciary duty is a
legal responsibility to act solely in the interests of another person, group or business. Failing to
uphold these duties may be considered a breach of your fiduciary duties, which may lead to a
business dispute. There are numerous examples of fiduciary relationships. For example, an
investment manager might owe a fiduciary duty to the participants in a pension plan. As a fiduciary,
or someone who owes such a duty, you make take legal title to certain assets. However,

Legal Concepts Of The Firm
1.1 Legal Different Concepts of the Firm:
The precise legal details of the corporation's differ across countries. The company law of the U.K is
similar to the company law of the U.K because they share a common origin. The managers in both
countries have a fiduciary duty to the shareholders. In other words, they have a strong requirement
to act in the interests of shareholders. The channel through which shareholders exercises control of
company affairs is the board of directors. The board is elected by shareholders and typically on a
one–share vote basis. Sometimes multiple classes of shares exits, the main difference between
classes being the number of votes each share has attached to it. The board of directors consists of a
mix outside directors and inside directors, the latter being the top executives of the firm. It is rare
that the Chief Executive Officer (CEO) is not on the board. In both U.S and U.K the CEO often acts
as chairman as well. Once elected the board of directors of directors specifies the business policies
to be pursued by the firm. The role of management is to implement the policies determined by the
board. Shareholders have very little say in the affairs of the company beyond electing directors. For
example, it is the directors who decide on their own compensation, without any input from
shareholders. A committee of outside directors determines the senior management' compensation.
Except in unusual circumstances, such as a proxy fight, the outside

Essay on Downsizing: Fiduciary and Great Harm
Downsizing
There is a well known issue in corporations when it comes down to downsizing. Corporate
downsizing is that act of corporations cutting workers usually by closing whole plants or divisions
to increase profits. This practice is often used today and is thought by some to be a moral practice to
improve economy overall. On the other hand, some think that it causes the workers great suffrage
from unemployment, which leads to loss of homes, depression, and crimes. Furthermore, it affects
the economy by the decrease in money flow. Many believe that the people who invest their money
in the corporation (shareholders) deserve to have the most interest from the managers to maximize
their profits. One method of maximizing their profits is ... Show more content on Helpwriting.net ...
Orlando counters by stating that there is not an actual regulated duty. "Fiduciary duties" are a label
for the obligations that a manager owes a shareholder doesn't create or establish duties to the agent.
Another agrument for the employees having equal interest as shareholders is that shareholders
should have legitimate expectation, meaning shareholders invest their capital should know their
risks and expect gains and sometimes losses. Fairness is the third argument against downsizing.
Orlando states that one should not be punished or reward for things out of their control. Workers
who lose their jobs, even if was doing job well, due to downsizing is wrong. This gives workers
insecurity at the work place because they know no matter how well they do their jobs; they can be
laid off because of any type of mismanagement.
One argument for corporate downsizing I choose to asses is the claim that since shareholders have
invested money, they hold interest from managers over all other parties. Furthermore, The
Corporation should operate for the shareholders benefits since they invested money.
One argument against corporate downsizing is it is not moral to cause a great harm for a lesser
benefit, even to a greater number of people. Also wrong to cause a great harm to a few in order to
cause a great benefit to many. No amount of harm is right if it is used to

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