Loft, Inc. manufactured and sold candies, syrups, and beverages. It also operated 115 retail candy and soda fountain stores. Loft sold Coca-Cola at all of its stores, purchasing its 30,000-gallon annual requirement of the syrup and mixing it with carbonated water at its various soda fountains. In May 1931, Charles Guth, the president and general manager of Loft, became dissatisfied with the price of Coca-Cola syrup and suggested to Loft’s vice president that Loft buy its syrup from National Pepsi-Cola Company. Soon thereafter, Guth bought Pepsi’s secret formula and trademark for only $10,000. 

He organized a new corporation, Pepsi-Cola Company, of which he and his family owned a majority interest. From 1931 to 1935, without the knowledge or approval of Loft’s board of directors, Guth used Loft’s working capital, its credit, its plant and equipment, and its key personnel to produce Pepsi-Cola syrup. In addition, by dominating Loft’s board of directors, Guth made Loft the chief customer of Pepsi-Cola. By 1935, the value of Pepsi-Cola’s business was several million dollars. Loft brought suit, charging Guth with usurping a corporate opportunity and demanded that Guth give his Pepsi- Cola shares to Loft. Did Guth usurp a corporate opportunity?