Barney Grant, the President of Parts Plus Corporation, a Michigan Corporation, has come to your office for legal advice. In your interview with Mr. Grant, he reveals the following information about his dealings with Auto Blast, Incorporated, and Masterpiece Automotive, Incorporated-two Michigan businesses located in the Detroit Area. Auto Blast, Inc. and Masterpiece Automotive, Inc. are both engaged in the manufacturing of widgets for the automotive industry. Both companies were interested in developing a high speed, extra-strength widget, but neither company could afford the development costs of such an undertaking. Bob Green, president of Auto Blast, Inc. approached Fred Mason, president of Masterpiece Automotive, Inc. and suggested that the two companies proceed jointly in the development of the new widgets. After much negotiation, they agreed that they would fund the development costs equally and share whatever profits and losses were generated equally. The enterprise was to be known as "Super Widgets Company." In furtheance of this agreement, Super Widgets Company, represented by Green and Mason, borrowed $1 million from Middle Lansing State Bank to fund the enterprise. Additionally, Super Widgits Company leased a vacant manufacturing facility from Brown Realty Company, and they began operations and were soon successful in selling the super widget. Soon after their success-thinking big thoughts, Fred Mason decided to lease an aircraft for Super Widgets Company from Acme Aircraft Leasing Company. He also decided that Super Widgets Company's success could be benefited by sponsoring a NASCAR racing team-so he signed Martin Sterling, a noted driver, to a one-year contract to drive fo the Super Widgets team. Mr. Mason neglected to mention either of these transactions to Mr. Green. Even as successful as Super Widgets has become, Auto Blast, Inc. and Masterpiece Automotive, Inc discovered that they needed more capital to continue to ramp up production. They approached Parts Plus Corporation, though Mr. Grant for additional funding. Mr. Grant explained how he agreed to invest $1 million and to share equally in the profits and losses of the venture with Auto Blast and Masterpiece Automotive. The product was great and the future looked bright. However, shortly after this investment of capital by Parts Plus, -Total Widgits, Inc. a competitor, developed and marketed a vastly superior widget and within 6 months, Super Widgit Company's revenues were down by 75%. Before long, Super Widgit Company was in default with the bank, its landlord, and Acme Aircraft. After reciting these facts to you, Mr. Grant explains that he is currently getting calls from the various creditors of Super Widgets Company demanding payment.

What type of business organization was created by these 3 companies? Is it a partnership or

What are the legal requirements of this formation?

What liability exposure does Parts Plus Corporation have to Middle Lansing Bank, Brown realty, Acme Aircraft, and Martin Sterling?

What rights, if any, does Parts Plus Corporation have against Auto Blast, Inc. and Masterpiece Automotive, Inc.?

Answer rating: 100% (QA)

Answer Based on the information provided the business organization created by Auto Blast Inc Masterpiece Automotive Inc and Parts Plus Corporation app... View the full answer