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BUS 307 Case Study 2 – Professional Memo
Jennifer Moore
Professor
BUS 307- Business Law II
November 27, 2022
BUS 307 Case Study 2 – Professional Memo
To:
Fred and Sally
From: Jennifer Moore
Date: November 27,2022
Subject:
Fred’s Miracle Cough Syrup
This memo's objective is to make you aware of any potential
legal problems resulting from Jane's theft. I will also give you
information on civil claims you might have, the various sorts of
commercial bankruptcy lawsuits, and other legal options that

could be used to prevent the bankruptcy of Fred's Miracle
Cough Syrup.
Legal Defences
For a court to render a verdict, the defendant must have the
opportunity to defend oneself against the civil allegations.
Common law mandates that the person accused of a crime must
present a defence in order to determine whether or not they
should be found guilty of the crime. If there is no tangible proof
confirming their guilt, the defendants must provide evidence to
support their innocence or refute the accusations. In these
instances, Jane used a fake check to settle her debts to Don. If
Don receives the check, he may charge Fred and Sally of fraud.
Since their document is fraudulent, Fred and Sally cannot
compensate Don. Given that there is no connection between
them, a strong defence against the allegation is likely.
In this instance, Jane is responsible for maintaining company
documents. She has no part in business leadership, management,
sales, processing, or delivery. Therefore, it is not her function
and responsibility to make payments. Due to her lack of
integrity and responsibility, she has compromised the
organization's ideals by falsifying the check and acting above
her authority. A violation of duty is a criminal offense.
Consequently, the defendants may assert that Jane behaved as
an individual and not as a corporation (Ambos, 2018). The
check was meant just for buying of Fred Miracle syrups, but
Jane wanted to use it to settle a few of her personal debt. There
is no binding official document between Don and Fred. In the
absence of an agreement between two parties, there is no
contract. Fred and Sally thus are not accountable to Don. Given
there was no contract, neither Sally nor Fred received any
services from Don. Therefore demonstrating that Fred and Sally
are not responsible for Don's civil lawsuits.
Jane was responsible for the gambling obligation, not Fred's
business, because she was the one who obtained the service
from Don's company. Don should therefore submit the
complaint to Jane and not Fred and Sally. Jane also exceeded

his authority, thus neither Fred nor Sally are responsible for her
acts. Consequently, she should bear the loss as a result of her
conduct. Fred and Sally will be victorious in their case since
they are in no way responsible to Don (Ambos 2018).
Church
Offerings are contributions or donations made to the church.
Therefore, the cheque with Fred and Sally's names that Jane
presents in church seemed to be a gift. The cheque was issued
without Fred and Sally's permission. Jane fabricated the check,
which bears the signatures of Fred and Sally. Hence, the church
might sue them for misleading or deceptive conduct over the
counterfeit check issue, as it is impossible to determine whether
they are being genuine and honest. In this scenario, Fred and
Sally might try to disprove the claim by claiming that in order
for a payment to be considered legal, it needs to be authorized
by the signatory of the account. They must thus show that Jane
really did falsify their signatures in order to prove that they are
immune from liability and cancel the transaction (Aldulaimy,
2020). They ought to keep the cheque as well as the evidence
that Jane attempted to give it to Don but was ineffective. They
will prevail in their arguments, resulting in the court penalizing
Jane.
Civil Claims against Jane
Jane has caused financial harm to the company through theft
and forgery on multiple occasions. Because of their
wrongdoing, Fred and Sally have lost all of their business's
credibility and can no longer afford to run their operations. It is
illegal to create a fake document, especially if it is going to be
used fraudulently. Consequently, Fred and Sally have legal
grounds to sue Jane for forgery and deception. Sally and Fred
are the only authorized signatories for the company bank
account (Parness, 2018). Jane has no authority over the
company's finances, yet she still made a photocopy of their
falsified signatures to use in her transactions. Sally must do a
comprehensive assessment of their company's financial accounts
in order to uncover any proof that Jane has used faked cheques

to pay for her own expenses or without Sally and Fred's
permission. Consequently, establishing Jane's liability for fraud.
To be successful in their allegations, they need adequate proof
against Jane showing that the cheques utilized to help complete
these transactions were not approved by the authorized
signatories, but instead by an impersonator identifiable as Jane.
Bankruptcy
A large number of companies are forced to declare bankruptcy
every year as a result of poor financial management and
unforeseen catastrophes. In the event that a firm is unable to
pay off its debts, a legal process is initiated in order to seek
relief from the full or partial weight of the obligations. In
circumstances like this, the most frequently used varieties of
bankruptcy are chapter 7 and chapter thirteen. The process of
selling off one's possessions is covered in Chapter 7. The sale
of the assets is done to satisfy the obligations that have been
incurred to the creditors. The liquidation process shall take six
months or 180 days from the date of filing for bankruptcy. Once
the lawsuit is solved, there should be no more debts, regardless
of whether or not all obligations have been paid. In chapter
thirteen, home savings, auto savings, and home savings using
are discussed. It was suggesting that the issuer of the asset for
reimbursement is not invariably the debtor. For this to occur,
the debt must have reached a certain threshold, and the court
will prolong the debtor's payment period until all debts are paid
(United States Courts, 2010). After the conclusion of the case,
the debtor retains ownership of the asset.
Effects of Possible Bankruptcy
The company's conversion to sole proprietorship eliminates any
impact on personal assets from a prospective business
insolvency process. When one individual runs all aspects of a
firm, that entity is called a "sole proprietorship" (Foss et al.,
2021). All of the initial funding comes from that one source, be
it loans or personal wealth. Although the sole proprietor may
employ others to help with business choices, he retains ultimate
authority. The sole proprietor takes on all the rewards and

losses of the company. In addition, a single proprietorship is not
considered a separate entity from its owner for legal purposes.
Companies and sole proprietors are subject to the same rules
and laws. The sole proprietor as well as the business coexist.
Therefore, they are same.
Family Assets
A sole proprietorship is a form of business that is owned by an
individual and he/she owns all the rights. The proprietor is
individually responsible for all debts and obligations incurred
by the company (Foss et al., 2021). In the event that the
company's assets are insufficient to cover its debts, the owners
may be forced to liquidate their personal holdings to do so. As a
result, the owner's business and private property may be taken
by creditors in the event of non-payment of bills. In the event
that the entity goes bankrupt, these may have an effect on the
property of family members even though they do not control the
business.
Intellectual Property
Sam decided against pressing forward with moving into an elite
supply deal with Bob, the proprietor of a home drugstore. Bob's
temper flared up, and he went back to using the modified cough
syrup strategies. After some time, Bob posted the method for
exacting revenge online. In the event that Bob violates Fred's
intellectual property rights, Fred can file a lawsuit against Bob
in the form of copyright infringement or patent infringement.
Businesses and corporations take steps to protect their copyright
interests by registering existing works and producing new ones.
If interested parties are willing to pay for the owners' products
or enter into licensing agreements, they can gain permission to
use the copied works (Savelyev, 2018). Nonetheless, there are a
number of factors that can make it easier for third parties to
infringe, such as a shortage of supply channels for the protected
work or a rise in the price of permitted works. As a result,
copyright infringement occurs when content protected by
copyright laws and regulations is used without permission from
the content's owner.

Once an organization has applied for and been awarded a patent
for an invention, they have exclusive rights to that invention
and can prevent anyone from making, using, or selling it.
Companies or individuals who carry out these actions without
authorization are infringing on the rights of the patent's rightful
owner. Hence, patent infringement occurs when one sells or
uses a patented invention without the owner's consent. Direct
and indirect infringements of patents can occur in a number of
different ways. Infringing can include, for instance, willful
infringement upon the patent rights of a competitor (Kim &
Yoon, 2021). The infringer is aware of the firm's patent yet
chooses to ignore it anyhow. The infringement may make use of
all of the firm's claimed patent inventions. Consequently, Fred
will win his case against Bob for patent and copyright violation.
Bob published Fred's secret recipe for cough syrup without
Fred's knowledge or permission, leading to this.
Intellectual property takes the form of trade secrets, which are a
type of confidential business procedures that are not disclosed
to anyone who are not affiliated with the firm. This method is
considered a competitive advantage because it was developed
in-house thanks to research and development efforts
(Frankenfield, 2021). Based on the evidence presented in the
court, Bob divulged the recipe for the cough syrup without first
obtaining permission from the manufacturer, which led to the
exposure of a significant commercial secret. If information had
inherent economic value, then the United States government
classifies it as a trade secret.
References
Aldulaimy, F. (2020). Exceeds the limits of the right to legal
defense under international law.
alrafidain of law,
22(70). ISSN: 1648-1819 (Print)
Ambos, K. (2018, December). International economic criminal
law. In

Criminal Law Forum (Vol. 29, No. 4, pp. 499-566).
Springer Netherlands.
https://doi.org/10.1007/s10609-018-9356-9
Foss, N. J., Klein, P. G., Lien, L. B., Zellweger, T., & Zenger,
T. (2021). Ownership competence.
Strategic Management Journal,
42(2), 302-328.
https://doi.org/10.1002/smj.3222
Frankenfield, J. (2021). Trade Secret. Investopedia. Retrieved
from:
https://www.investopedia.com/terms/t/trade-secret.asp
Kim, S., & Yoon, B. (2021). Patent infringement analysis using
a text mining technique based on SAO structure.
Computers in Industry,
125, 103379.
https://doi.org/10.1016/j.compind.2020.103379
Parness, J. A. (2018). Principles Guiding Civil Claim
Settlements.
Principles Guiding Civil Claim Settlements, Lexis
Nexis.
ISBN 978-1-6328-3-7189
Savelyev, A. (2018). Copyright in the blockchain era: Promises
and challenges.
Computer law & security review,
34(3), 550-561.
https://doi.org/10.1016/j.clsr.2017.11.008
United State Courts. (2010). Types of Bankruptcy [Video].
YouTube.
https://www.youtube.com/watch?v=DXv-na6y8nE
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Professional Memo
Jennifer Moore
Southern New Hampshire University
BUS Law II
November 13, 2022
Professional Memo
TO: Fred and Sally
FROM: Jennifer Moore / Lawyer
DATE: November 13, 2022
SUBJECT: Issues and Facts of Business Law
Business Entities
The primary business entities include sole proprietorships,
partnerships, limited liability companies, as well as
corporations. Each form of corporate entity possesses its own
set of distinguishing qualities. A sole proprietorship is a
business entity in which a single person acts as both owner and
manager. The sole proprietor manages all aspects of the
company and takes full responsibility for any financial
obligations. This makes the sole proprietor personally liable for
the company's debts in the event of the company's insolvency. A
partnership is a business that is owned and managed by more
than one person. There are two types of partnerships: general
and limited. All partners in a general partnership are jointly and
severally responsible for the partnership's obligations. This
implies that in the event of the partnership's insolvency, the

onus of payment for the obligations will fall on each individual
member (Beatty et al., 2018). A limited partnership consists of
at least one general partner who assumes responsibility for the
firm's obligations and liabilities and one or more limited
partners who do not. Limited liability firms are statutory
bodies that provide limited liability protection for its owners.
This protects the owners from having their own assets seized to
pay off the company's debts. An LLC might have one member or
several. The lone "member" of a single-member limited liability
business is its sole proprietor. It takes two or more people to
form a multi-member limited liability business (Xue et al.,
2020). A corporation exists independently from its shareholders.
This protects the owners from having their own assets frozen
because of the corporation's debts. A company might be
organized for profit or not. Business entities that are organized
primarily to generate profit are called "for-profit" corporations.
Businesses that don't make a profit for their shareholders but
instead exist to further a charitable cause are called "not-for-
profits."
Product Liability
Product liability refers to the legal obligation that falls on the
shoulders of the maker or seller of an item to reimburse any
customer who sustain injuries as a result of using that product.
Product liability law varies from country to country, but there
are generally three types of product liability claims:
manufacturing defects, design defects, and warning defects. A
manufacturing defect is a flaw in the manufacturing process that
makes the product unsafe. A design defect is a flaw in the
design of the product that makes it unsafe (Beatty et al., 2018).
A warning defect is a lack of adequate warnings or instructions
on the product that makes it unsafe. There are several product
liability issues present in the case of Fred's Miracle Cough
Syrup. First, there is a risk that the product may not be
effective. If the cough syrup does not work as advertised, Fred
could be sued for false advertising. Second, there is a risk that

the product may cause adverse side effects. If Fred's cough
syrup causes any injuries or illnesses, he could be sued for
personal injury or wrongful death. Third, there is a risk that the
product may be counterfeit. If Fred's cough syrup is not the real
thing, he could be sued for fraud. Finally, there is a risk that the
product may be mislabelled. If the labels on Fred's cough syrup
are inaccurate or misleading, he could be sued for false
advertising or misleading marketing.
There are several steps Fred can take to mitigate the risks
associated with his product. First, he should ensure that his
product is effective. He can do this by conducting clinical trials
and/or hiring an independent testing company to test his
product. Second, he should ensure that his product is safe. He
can do this by conducting safety testing and/or hiring an
independent safety testing company to test his product. Third,
he should ensure that his product is correctly labelled. He can
do this by hiring a professional labelling company to create his
labels. Finally, he should take steps to ensure that his product is
not counterfeit. He can do this by trademarking his product
and/or hiring a professional anti-counterfeiting company to
protect his product.
Agency Relationship
The legal concept of agency alludes to the link that exists
between two or more individuals, who are collectively referred
to as agents, in which one of them performs an action on behalf
of the other, who is referred to in this context as the principle.
In the same vein, one may also operate in favour of either the
firm or the government in certain circumstances based on the
contract that was agreed upon. In most cases, the agent as well
as the principle are the parties involved in this relationship;
nevertheless, none of these parties can legitimately claim to act
as the agent of the other within the context of this formation.
Consequently, the agency law in the situation of Sam and Fred
as described in the case remained absent as the former acted
merely as a worker to the parent, in this scenario Fred,
regardless of the fact that Sam later acquired half ownership of

the business (Beatty et al., 2018). Prior to and even after the
development of the company, Sam's participation in this firm
does not always result in the construction of an agency
relationship with Fred. This is mostly due to the absence of any
kind of agreement between the two parties, which would allow
one to act in the other's place whilst the other is away and
prevent Sam from pretending to fulfil Fred's obligations.
Real Property
The location of the company, a family farm in this instance,
presents possible real estate concerns. There could be potential
zoning issues if the farm is located in a rural area that does not
allow for commercial businesses. Zoning regulations are put in
place to control the development of land and protect the health
and well-being of the community. If the farm is located in a
rural area that does not allow for commercial businesses, this
could limit Fred's ability to operate his business and sell his
cough syrup. There could also be issues with the property title
if the farm has been in the family for generations and is held in
trust. If the farm has been in the family for generations and is
held in trust, there may be restrictions on how the property can
be used (Beatty et al., 2018). These restrictions could limit
Fred's ability to use the property for his business. Secondly,
there may be problems with running the business if the
necessary permission to do so on this land isn't in place. Fred
would need the license in order to legally run his business in the
city. Thirdly, it would be difficult to enforce the requirement
that the home-based company be located on the family's
property. It would entail, among other things, making sure there
is enough room to grow into the property that personnel have
easy access to the building, and that utilities are set up in a way
that works for them.
Manufacture
Yes, the manufacture of Fred's Miracle Cough Syrup on the
family farm does necessitate a formal transfer of ownership or
possessory rights. This is because when Fred manufactures the
cough syrup on the farm, he is using farm resources to do so.

Therefore, he needs to formally transfer ownership or
possessory rights in order to use the farm resources for his
business. Some of the resources that Fred would need to use in
order to manufacture his cough syrup on the family farm include
the land itself, any buildings or structures on the property, and
any equipment or machinery that is needed. In order to use
these resources, Fred would need to get permission from the
owner of the farm (likely his parents or grandparents). Once he
has obtained this permission, he can then go about setting up his
business (Beatty et al., 2018). There are a few different ways
that Fred can go about transferring ownership or possessory
rights to the family farm resources. One option is to simply
lease the land from the owner. This would give Fred the right to
use the land for his business for a set period of time, after
which he would need to renew the lease or return the land to the
owner. Another option is to purchase the land outright from the
owner. This would give Fred full ownership of the land and he
would not need to renew the lease or return the land at the end
of the lease period. Another option for Fred is to enter into a
partnership with the owner of the farm. This would involve both
parties sharing ownership of the land and any resources on it.
The partnership agreement would need to be drawn up in order
to specify the rights and responsibilities of each party.
Personal Property
Sam's car being used to transport the goods raises a number of
questions about ownership of various items. Vehicle liabilities
are one concern, as accidents as well as other types of damage
are unfortunately possible in the line of duty. If an accident
were to occur while making deliveries or performing other tasks
directly linked to the company's operations, it would be Fred
and Sam's responsibility to make sure the vehicle was
adequately insured. Also, as noted by Bian et al., (2018) well-
crafted vehicle policies would be essential in preventing the car
that in this case acts as the means of transportation of items,
from being used for purposes unrelated to the company. Finally,
using Sam's car to convey the products to customers would have

tax implications. As a result, Sam will need to keep meticulous
records of the company's expenditures. In the event that Sam
does not get compensation for Fred's use of his vehicle, he will
be able to deduct this expense from his taxable income by
keeping meticulous records.
Liability Issues
When Sam's vehicle is used for business-related deliveries, both
Sam and the company are put in a position where they could be
held liable for a variety of negligence-related liabilities. These
liabilities could, in most circumstances, range from hiring and
retaining employees all the way to the actual servicing of Sam's
car. In this context, negligent recruiting refers to a circumstance
in which a party engaged in an accident may prosecute the
owner of the business for potentially hiring an inexperienced
driver and deciding to keep them despite the fact that they were
involved in creating an accident (Beatty et al., 2018). Therefore,
prior to hiring Sam, Fred needs to perform the necessary
research to guarantee that Sam is still competent for the job.
The term "negligent lending" refers to the practice of extending
driving privileges to those who do not meet the requirements, in
this case to unsuitable employees who are aware of their
circumstances. If Fred was cognizant of Sam's health situation
at the time of the accident, this would indicate that he should
still be held responsible for the incident. It is considered
negligent maintenance when one does not take the necessary
precautions to guarantee that the delivery vehicle is kept in a
safe condition at all times.
Estate Planning
Some potential estate planning difficulties include a lack of an
extensive strategy, the absence of professional engagement, and
the absence of regular evaluations. In the first case, the state
statutes would step in after the demise of the proprietors to fill
the void left by the absence of a detailed plan. Here, Fred needs
to make sure there's a solid strategy in place for what to do after
the heirs are gone. As for the second concern, the company's
demise is guaranteed if its owners refuse to seek professional

assistance in running the company. As a result, Fred must
pursue and pay for specialist counsel on the management of this
company, including its web appearance, rather than restricting
service to relatives. The third aspect of performing reviews
describes the company's standing. Consequently, the proprietors
of this organization, led by Sam, should adhere to this
procedure strictly to prevent its eventual demise.
Transfer Ownership
If Fred and Sally want to make sure that both Sam and Lilly
benefit from the family business, they can use estate planning
tools like trusts and family limited partnerships. Trusts are
useful in this situation because they allow Fred and Sally to
transfer ownership without giving up access to their riches
while they are still alive (Beatty et al., 2018). The drawback is
that Sam and Lilly will not be able to enjoy all the advantages
of the land throughout their parents' lives. Fred and Sally will
benefit from the family limited partnership since they will not
have to give up control of the business following the transfer,
whereas Sam and Lilly will suffer the opposite fate.
Business Entity
Following a condensed investigation into the concerns raised up
top, it has become clear that operating a firm as a sole
proprietorship is the most prudent course of action. Since the
company is not very large at the moment, it is hoped that Fred
will be able to expand it more quickly and then hand Sam some
of the company's ownership.
Best regards,
Jennifer Moore
References
Beatty, J. F., Samuelson, S. S., & Abril, P. (2018).
Essentials of Business Law. Cengage Learning.
Bian, Y., Yang, C., Zhao, J. L., & Liang, L. (2018). Good
drivers pay less: A study of usage-based vehicle insurance

models.
Transportation research part A: policy and practice,
107, 20-34.
Nurumov, D. (2020). Role and Importance of Advocacy In
Legal Support Of Business Entities.
The American Journal of Political Science Law and
Criminology,
2(12), 117-122.
Xue, Y., Temeljotov-Salaj, A., Engebo, A., & Lohne, J. (2020).
Multi-sector partnerships in the urban development context: a
scoping review.
Journal of Cleaner Production, 122291.
BUS 307 Final Project Guidelines and Rubric
Overview
Business law plays an integral part in both our personal and
professional lives. A solid grasp of essential business law
concepts is critical for the successful
navigation of complex and diverse business environments. You
will assess relevant legal issues as well as apply the discipline-
specific knowledge necessary to
successfully address real-world business situations such as
business formation and management, liability issues, and
compliance with government and industry

regulations, as well as to effectively communicate issues and
facts to peers and professionals.
The final project represents an authentic competency, as you
will have the opportunity to present your analysis of the legal
and ethical issues involved in three
hypothetical business scenarios as well as to evaluate and make
recommendations to avoid such issues in the future.
This assessment addresses the following course outcomes:
• Apply the law regarding business relationships, such as
agency law, partnership, and corporate law as strategies for
appropriate and effective business
management
• Analyze issues of real and personal property as they pertain to
business formation and management
• Determine the legal rights and duties of the parties to
commercial paper for their impact on fundamental business
operations
• Analyze the rights and duties of the parties in credit
transactions, including secured transactions and bankruptcy law,
as they apply to fundamental
business operations
• Evaluate the impact of government regulation on business
practices for strategic and compliance purposes
Prompt
The final project for this course consists of two milestones and
the final project submission. Milestones One and Two take the

form of short answers crafted in
memo format from the perspective of a corporate attorney
making recommendations to a client. For Case Studies 1 and 2,
craft a professional memo for each,
appropriate in format, tone, and content, to send to your clients
Fred and Sally, with your preliminary thoughts on the issues
within. Your memos should illustrate
the issues and relevant law, apply the facts, and support your
conclusions with regard to each issue. Always remember to be
clear, kind, and professional in your
communications. The third element, Case Study 3, will be a
short, 2–3-page essay in APA format that will require you to
independently issue-spot as well as
provide a factual analysis of relevant law and recommendations.
You will receive feedback on both milestones and the initial
element of Case Study 3. Make any
necessary revisions and then include them all in the final
submission, where you will label them as Case Study 1, 2, and
3.
Case Study 1
Fred is well known in his town for his homeopathic cough
syrup. After years of encouragement, he has decided to take his
miracle cough remedy to market as
“Fred’s Miracle Cough Syrup.” While his cough syrup is
homeopathic, one of the key ingredients causes a severe
reaction when taken in conjunction with aspirin.
Fred plans to make and bottle his cough syrup in an outbuilding
on the family farm. His son, Sam, has been raving to the locals
about his father’s cough syrup for
years, and the local drug store and grocer have contacted Fred
to place orders as a result. Sam also intends to approach several
national chains in an effort to
secure supply contracts for Fred’s cough syrup. Fred has asked
Sam to assist him with deliveries, as Sam has a van. Fred would

like Sam to be involved with the
business as an employee initially, with the option of making
him a partial owner at a later time. Fred and his wife Sally have
two children, Sam and Lilly. Both live
in cabins on the family farm with their spouses and children.
Fred and Sally engage you as their attorney to assist with the
formation of the new business,
including determining the appropriate business entity type,
management issues, product liability issues, and estate planning
for both the business and family
property. After your initial meeting, you identify and research
the following issues.
Specifically, the following critical elements must be addressed:
I. Describe the main types of business entities and their
defining characteristics.
II. Apply product liability law and determine what issues are
present. How would you advise your client to mitigate those
issues?
III. Apply the elements and characteristics of an agency
relationship to Sam’s actions. Does Sam’s involvement prior to
the business formation, as well as his
anticipated role once the business is formed, create an agency
relationship? Why or why not?
IV. Identify potential real property issues based on the location
of the business on the family farm. Justify each potential issue.
V. Does the manufacture of Fred's Miracle Cough Syrup on the
family farm necessitate a formal transfer of ownership or
possessory rights? Defend your response.

VI. Identify potential personal property issues based on the use
of Sam’s personal vehicle to deliver the product. Justify each
potential issue.
VII. Does the use of Sam's personal vehicle in the course of
business expose Sam or the business to any liability issues?
Defend your response.
VIII. Identify potential estate planning issues with regard to the
business and the family farm. Justify each potential issue.
IX. What estate planning vehicles are available to Fred and
Sally should they desire to transfer ownership in the business
and family farm, respectively, to Sam and
Lilly equally? What are the advantages and disadvantages to
each?
X. Applying your analysis of the issues above, which type of
business entity do you recommend for Fred’s Miracle Cough
Syrup and why?
Case Study 2
Fred’s Miracle Cough Syrup has hit the market and become a
huge success with the burgeoning integrative medicine
demographic. Per your advice, Fred has
patented his famous concoction and trademarked the Fred’s
Miracle Cough Syrup name and logo. Demand is so high that
Fred and Sally are working full-time on
the business. Their children, Sam and Lilly, and their respective
spouses, Jane and Tim, have joined the company full-time as
well. In fact, Fred and Sally have
made Sam and Lilly part owners of the business. Fred, Sam, and
Tim handle the production, sales, and delivery. Sally and Lilly
handle the majority of the
administrative and business management tasks, while Jane acts
as the bookkeeper. Sally and Fred are the only authorized
signatories on the corporate account.

Sally and Lilly have been hard at work securing a new
production facility and distribution chain to accommodate an
upcoming contract with a national chain.
After locating a large warehouse on several acres, Sally and
Lilly approach their local credit union for a loan. The business
has only one business credit card used
to purchase supplies for the production of Fred’s Miracle Cough
Syrup, and there is a small mortgage outstanding on the family
farm. Personal debts of the
individual family members consist of small credit-card balances
for Fred, Sally, Sam, and Lilly as well as an auto loan on Sam’s
van.
During the commercial loan accounting review process, Sally
and Lilly discover that Jane has been siphoning off large
amounts of corporate money and “cooking
the books” to hide her actions. Jane has written several checks
from the corporate account and forged both Sally’s and Fred’s
signatures. Jane has made out all
but one of the forged checks to Don, a local loan shark, in an
effort to repay her gambling debts. The check Jane did not
deliver to Don was made out to “Cash,”
which she slipped into the collection box at church in an effort
to absolve her guilt. The embezzlement was so severe that the
family fears that Fred’s Miracle
Cough Syrup is now on the brink of bankruptcy. Meanwhile,
Sam’s refusal to enter into an exclusive distribution deal with
the local drugstore has enraged Bob,
the owner. Bob has now reverse engineered Fred’s cough syrup
recipe and has posted it online in an act of vengeance.
As Fred and Sally tearfully recount the events of the past

month, you reassure them that you are on the case, and you
begin to ponder the legal issues at hand.
I. What legal defenses might Fred and Sally raise with regard to
the checks written by Jane to Don? Why do you believe they
will be successful or unsuccessful?
II. What legal defenses might Fred and Sally raise with regard
to the check written by Jane and delivered to the church? Why
do you believe they will be
successful or unsuccessful?
III. What, if any, civil claims do Fred and Sally have against
Jane based on her actions? Why do you believe they will be
successful or unsuccessful?
IV. Analyze the forms of bankruptcy available to the business in
this instance (assume the business entity is the same form as
you chose in Case Study 1).
What form is most appropriate and why?
V. Analyze the implications of a potential bankruptcy action on
the business assets (assume the business entity is the same form
as you chose in Case Study
1). Explain which, if any, are subject to forced sales, liens, or
forfeiture.
VI. Analyze the implications, if any, of a potential bankruptcy
action by the business on the assets of the individual family
members (assume the business entity is
the same form as you chose in Case Study 1). Explain if the
assets of business owners are subject to forced sale, liens, or
forfeiture.
VII. What legal recourse does Fred have against Bob for
infringement of intellectual property rights? Do you believe he

will be successful? Why or why not?
Case Study 3
Both Fred’s family and the business have rebounded from their
prior issues. Jane sought counseling for her gambling issues and
has worked hard to mend her
relationships with the family. Prior to cashing the forged checks
from Jane, Don was struck by lightning and experienced a
spiritual enlightenment. He willingly
returned the checks to Fred and Sally and promptly joined the
Peace Corps. Likewise, when the church found out the donated
check was a forgery, it was
immediately returned. Bob’s wife (also Sally’s best friend)
found out about Bob’s online sabotage and promptly remedied
the situation. Once Fred’s Miracle
Cough Syrup was back on track, the company’s growth was
exponential. Featured on a widely viewed talk show starring a
prominent doctor, online orders and
demands from big-box chains nationwide skyrocketed. Fred and
Sally have been told that now would be an ideal time to take
Fred’s Miracle Cough Syrup public.
The only distressing issue at hand involves Tammy, a local girl
who had been working as a delivery girl for the company. She
applied for Jane’s former job as
bookkeeper. Fred and Sally hired Ted, an experienced
accountant, instead, and Tammy has filed a claim of sex
discrimination against the company and Fred
personally. Fred and Sally are seeking your advice regarding
Tammy and the possibility of taking the company public.
Complete a legal analysis of the given facts, including the
following elements.

I. Evaluate three current or potential legal and/or regulatory
issues apparent in this fact pattern that might impact a public
offering.
II. Determine whether Fred's Miracle Cough Syrup is in
compliance with government regulations involving public
offerings by analyzing relevant laws and using
the appropriate legal test and facts given.
III. Support your conclusions and provide recommendations to
improve compliance and strategies for corporate growth.
Milestones
Milestone One: Case Study 1
In Module Three, you will read Case Study 1 of the final project
and respond in “memo” format to the client, addressing the
listed critical elements. This
milestone is graded with the Case Study 1 Rubric.
Milestone Two: Case Study 2
In Module Five, you will view the video resource on
bankruptcy basics. Then, you will read Case Study 2 of the final
project and respond to the client in “memo”
format, addressing the listed critical elements. This milestone is
graded with the Case Study 2 Rubric.
Final Submission: Case Studies 1, 2, and 3
In Module Seven, you will read the module resources and then
respond to the remaining Case Study 3 critical elements,
incorporating your feedback from the

Module Six discussion topic. Submit the case study in a 4-7
page essay. Include rewrites of Milestones One and Two, and
submit all three case studies as a final
submission. This submission is graded with the Final Project
Rubric.
Final Project Rubric
Guidelines for Submission: Your three “memos” should be 4-7
pages each, double-spaced, with 12-point Times New Roman
font, and follow APA 7th edition
format for layout and citations.
https://www.youtube.com/watch?v=DXv-na6y8nE
Critical Elements Exemplary (100%) Proficient (85%) Needs
Improvement (55%) Not Evident (0%) Value
Case Study
1: Business
Entities
Meets “Proficient” criteria and
offers insight into the nuances
of each type of business entity
in relation to one another
Describes the main types of
business entities and their
defining characteristics
Describes the main types of

business entities, but does not
describe their defining
characteristics
Does not describe the main
types of business entities or
their characteristics
4.8
Case Study
1: Product
Liability
cites specific, applicable rules of
law
Applies product liability law to
determine issues and
recommends mitigating actions
Applies product liability law,
but does not recommend
mitigating
actions
Does not apply product liability
law to determine issues
4.8

Case Study 1:
Agency
Relationsh
ip
provides a thorough, step-by-
step analysis with specific
supporting evidence applied to
each element of the relevant
legal test
Applies elements and
characteristics of an agency
relationship to actions to
determine if an agency
relationship was created and
provides justification
Applies elements and
relationship to actions, but does
not determine if an agency
relationship was created, or
justification is not logical
Does not apply elements and
relationship to actions to
determine if an agency
relationship was created

4.8
Case Study 1:
Real Property
Meets “Proficient” criteria
and cites specific, applicable
rules of law
Identifies potential real
property issues based on the
location of the business on the
family farm and provides
justification for each
Identifies potential real
location of the business on the
family farm, but does not
provide justification for each
Does not identify potential
real property issues
4.8
Case Study 1:
Manufacture
of real property issues as they
pertain to business

Determines if the
manufacturing necessitates a
formal transfer of ownership or
possessory rights and defends
response
Determines if the
formal transfer of ownership
or possessory rights, but does
not defend response
Does not determine if the
formal transfer of ownership or
possessory rights
4.8
Case Study
1: Personal
Property
law
Identifies potential personal
use of Sam’s personal vehicle to
deliver the product and

provides justification for each
Identifies potential personal
use of Sam’s personal vehicle to
deliver the product, but does
not provide justification for
each
personal property issues
4.8
Case Study 1:
Liability Issues
and
of personal property issues as
they pertain to business
Determines if the use of a
personal vehicle exposes Sam
or the business to any liability
issues and defends response
Determines if the use of a
personal vehicle exposes Sam
or the business to any liability
issues, but does not defend

response
Does not determine if liability
issues are present
4.8
Case Study 1:
Estate Planning
law
Identifies potential estate
planning issues and
provides justification for
each
Identifies potential estate
planning issues, but does
not provide justification
for each
estate
planning issues
4.8
Case Study

1:Transfer
Ownership
offers insight into the
importance of estate planning
issues in business
Determines estate planning
vehicles available to transfer
ownership equally and provides
advantages and disadvantages
of each
Determines estate planning
vehicles available to transfer
ownership equally, but does not
provide advantages and
disadvantages of each
Does not determine estate
planning vehicle available
4.8
Case Study 1:
Business Entity
offers insight, based on

research, as to why the chosen
type of business entity would
be an appropriate choice for
Fred’s Miracle Cough Syrup
Applies legal and factual
analysis to form a
recommendation on an
appropriate business entity and
provides rationale
Applies legal and factual
analysis to form a
recommendation on an
appropriate business entity, but
does not provide rationale
Does not apply legal and factual
analysis to form a
recommendation
4.8
Case Study 2:
Legal Defenses
is well supported using
appropriate sources
Determines the legal defenses
with regard to the checks
written by Jane to Don and
explains why defenses would be

successful or unsuccessful
with regard to the checks
written by Jane to Don, but
does not explain why defenses
would be successful or
unsuccessful
Does not determine the legal
defenses with regard to the
checks written by Jane to Don
4.8
Case Study 2:
Church
is well supported with
appropriate sources
with regard to the check
written by Jane and delivered to
the church and explains why
defenses would be successful or
unsuccessful
with regard to the check
written by Jane and delivered

to the church, but does not
explain why defenses would be
defenses with regard to the
check written by Jane and
delivered to the church
4.8
Case Study 2:
Civil Claims
provides specific supporting
evidence applied to each
element of the relevant legal
test
Determines civil claims
availableto Fred and Sally
against Jane and evaluates
potential for success of those
claims
Determines civil claims
available to Fred and Sally
against Jane, but does not
evaluate potential for success
Does not determine civil claims
available to Fred and Sally

against Jane
4.8
Case Study 2:
Bankruptcy
and offers research to
illustrate why the chosen
types of bankruptcy would
be available based on the
chosen type of business
entity
Analyzes available forms of
bankruptcy based on the
chosen type of business entity
and determines which form is
most appropriate and why
Analyzes available forms of
bankruptcy based on the
chosen type of business entity,
but does not determine which
form is most appropriate or
why
Does not analyze available
forms of bankruptcy based on
the chosen type of business
entity

4.8
Case Study
2: Business
Assets
offers a nuanced insight into
the relationship between a
bankruptcy action by a
business and business assets
Analyzes implications of
bankruptcy on business assets
and explains which are subject
to forced sales, liens, or
forfeiture
bankruptcy on business
assets, but does not explain
which are subject to forced
sales, liens, or forfeiture
Does not analyze the
implications of bankruptcy on
business assets
4.8
Case Study 2:
Family Members
offers a nuanced insight into

the relationship between a
bankruptcy action by a business
and personal assets
bankruptcy on personal assets
of individuals and explains if the
assets are subject to forced
sale, liens, or forfeiture
Analyzes implications
of bankruptcy on
personal assets of
individuals, but does
not explain if the
assets are subject to
forced sale, liens, or
forfeiture
Does not analyze implications
of bankruptcy on personal
assets of individuals
4
.
8
Case Study
2:
Intellectual
Property

Righ
ts
law
Determines the legal recourse
Fred has against Bob and
explains why Fred will be
Determines the legal recourse
Fred has against Bob, but does
not explain why Fred will be
recourse Fred has against Bob
4.8
Case Study
3:
Regulatory
Issues
Meets “Proficient” criteria, and
choices are suitable and well

supported
Accurately evaluates three
current or potential legal
and/or regulatory issues in the
fact pattern that might impact a
public offering
Evaluates three current or
potential legal and/or
regulatory issues in the fact
pattern that might impact a
public offering, but evaluation
lacks accuracy
Does not evaluate potential
issues in the fact pattern
4.8
Case Study 3:
Legal Test
provides specific supporting
evidence applied to each
element of each relevant legal
test
Accurately determines whether
Fred’s Miracle Cough syrup is in

compliance by analyzing
relevant laws and using the
appropriate legal test and facts
given
Determines whether Fred’s
Miracle Cough syrup is in
compliance by analyzing
relevant laws and using the
appropriate legal test and facts
given, but determination lacks
accuracy
Does not determine whether
Fred’s Miracle Cough syrup is in
compliance
4.8
Case Study 3:
Recommendatio
ns
and uses discipline-specific
language to establish
expertise
Supports conclusions of law
and provides
recommendations to improve
compliance and strategies for
corporate growth

Supports conclusions of law,
but does not provide
recommendations to improve
compliance and strategies for
corporate growth
Does not support conclusions
of law or provide
recommendations
4.8
Articulation
of Response
Submission is free of errors
related to citations, grammar,
spelling, syntax, and
organization and is presented in
a professional and easy-to-read
format
Submission has no major errors
spelling, syntax, or organization
Submission has major errors
that negatively impact
readability and articulation of
main ideas

Submission has critical errors
that prevent understanding of
ideas
4
Earned Total 100%

1 2BUS 307 Case Study 2 – Professional Memo.docx

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1 2BUS 307 Case Study 2 – Professional Memo.docx