Enterprise Rent-A-Car (Enterprise) purchases 100 cars from General Motors (GM) on January 1, 2020. They sign...

 

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Enterprise Rent-A-Car ("Enterprise") purchases 100 cars from General Motors ("GM") on January 1, 2020. They sign a promissory note with GMAC for $5,000,000.00 due in 1 year at 10% interest. The parties also sign a security agreement listing these 100 cars as collateral. The cars are delivered mid-January and driven like they were being used to qualify for the Indy 500 for 6 months. On August 1, 2020, Enterprise places all 100 cars on its website as "for sale" like it does each month. Justin is a trustworthy used car dealer in Waco and purchases 10 cars from Enterprise through this same website the next day using a $250,000.00 revolving line of credit with First National Bank ("FNB"). Travis loves a good bargain and regularly purchases his family cars from Justin. On September 1, 2020, Travis purchased one of the former Enterprise cars from Justin with cash for his own personal use, The State of Texas issues a clear title for the car in Travis's name only. Thirty days later, Travis walks out of his office to discover that the car has been repossessed by employees of GMAC after Enterprise failed to make any required payments on the initial $5,000,000.00 loan. ISSUE: Did GMAC properly repossess Travis's car? Assuming the same facts as in Question #1, analyze the following: Travis purchased the car from Justin with cash that he secretly borrowed from the safe at the sports store that he owns through a small Texas corporation of which he owns 50% of the outstanding stock. His buddy, Scott, owns the other 50% of the outstanding stock. Travis has been extremely stressed out since the repossession because he couldn't find an attorney to take his case pro-bono (1.e. "for free") and he didn't have any money in savings since his small business has been financially destroyed by COVID closure mandates. While reconciling the books in preparation for the annual report, Scott discovers the "IOU" that Travis left in the safe and is livid. ISSUE: Explain any and all fiduciary duties that Travis owes to Scott and whether any such duties have been violated. Enterprise Rent-A-Car ("Enterprise") purchases 100 cars from General Motors ("GM") on January 1, 2020. They sign a promissory note with GMAC for $5,000,000.00 due in 1 year at 10% interest. The parties also sign a security agreement listing these 100 cars as collateral. The cars are delivered mid-January and driven like they were being used to qualify for the Indy 500 for 6 months. On August 1, 2020, Enterprise places all 100 cars on its website as "for sale" like it does each month. Justin is a trustworthy used car dealer in Waco and purchases 10 cars from Enterprise through this same website the next day using a $250,000.00 revolving line of credit with First National Bank ("FNB"). Travis loves a good bargain and regularly purchases his family cars from Justin. On September 1, 2020, Travis purchased one of the former Enterprise cars from Justin with cash for his own personal use, The State of Texas issues a clear title for the car in Travis's name only. Thirty days later, Travis walks out of his office to discover that the car has been repossessed by employees of GMAC after Enterprise failed to make any required payments on the initial $5,000,000.00 loan. ISSUE: Did GMAC properly repossess Travis's car? Assuming the same facts as in Question #1, analyze the following: Travis purchased the car from Justin with cash that he secretly borrowed from the safe at the sports store that he owns through a small Texas corporation of which he owns 50% of the outstanding stock. His buddy, Scott, owns the other 50% of the outstanding stock. Travis has been extremely stressed out since the repossession because he couldn't find an attorney to take his case pro-bono (1.e. "for free") and he didn't have any money in savings since his small business has been financially destroyed by COVID closure mandates. While reconciling the books in preparation for the annual report, Scott discovers the "IOU" that Travis left in the safe and is livid. ISSUE: Explain any and all fiduciary duties that Travis owes to Scott and whether any such duties have been violated.

Answer rating: 100% (QA)

Issue Did GMAC properly repossess Traviss Car Issue GMAC repossessed Traviss car for nonpayment of dues by Enterprise who sold it to Justin from whom Travis purchased it for paying cash and the State ... View the full answer