Jeffrey Krueger and Michael Torres, shareholders of Cru Energy, Inc., were embroiled in litigation in a Texas

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Jeffrey Krueger and Michael Torres, shareholders of Cru Energy, Inc., were embroiled in litigation in a Texas state court. Both claimed to act on Cru's behalf, and each charged the other with attempting to obtain control of Cru through fraud and other misconduct. Temporarily prohibited from participating in Cru's business, Krueger formed Kru, a company with the same business plan and many of the same shareholders as Cru. Meanwhile, to delay the state court proceedings, Krueger filed a petition for a Chapter 7 liquidation in a federal bankruptcy court. He did not reveal his interest in Kru to the bankruptcy court. Ownership of Krueger's Cru shares passed to the bankruptcy trustee, but Krueger ignored this. He called a meeting of Cru's shareholders-except Torres-and voted those shares to remove Torres from the board and elect himself chairman, president, chief executive officer, and treasurer. -e Cru board then dismissed all of Cru's claims against Krueger in his suit with Torres. Are there sufficient grounds for the bankruptcy court to dismiss Krueger's bankruptcy petition? Discuss.

Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....
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The Legal Environment of Business Text and Cases

ISBN: 978-1305967304

10th edition

Authors: Frank B. Cross, Roger LeRoy Miller

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