Joe, a resident of New Jersey, wants to open a restaurant. He asks Kay, his friend, an

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Joe, a resident of New Jersey, wants to open a restaurant. He asks Kay, his friend, an experienced attorney and a New Yorker, for her business and legal advice in exchange for a 20 percent ownership interest in the restaurant. Kay helps Joe negotiate a lease for the restaurant premises and advises Joe to organize the business as a limited liability company (LLC). Joe forms Cafe Ole, LLC, and with Kay’s help, obtains financing. Then, the night before the restaurant opens, Joe tells Kay that he is “cutting her out of the deal.”The restaurant proves to be a success. Kay wants to file a suit in a federal district court against Joe and the LLC. Can a federal court exercise jurisdiction over the parties based on diversity of citizenship? Explain.

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Business Law Text and Cases

ISBN: 978-0324655223

11th Edition

Authors: Kenneth W. Clarkson, Roger LeRoy Miller, Gaylord A. Jentz, F

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