Planes-for-Rent, Inc., (PFR) leases airplanes. Dayton, LLC, is one of PFRs customers. Dayton is a limited liability

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Planes-for-Rent, Inc., (PFR) leases airplanes. Dayton, LLC, is one of PFR’s customers. Dayton is a limited liability company with one member, Jacob, who is Dayton’s sole owner. Dayton and PFR executed a five-year contract that calls for PFR to make available to Dayton a certain model plane four business days each month. The arrangement worked well for approximately two years. However, in the third year of the contract, Dayton began to experience financial problems. Because of these problems, the chief financial officer of Dayton contacted PFR’s chief executive officer to inform her that Dayton is unable to pay its \($248,000\) outstanding debt to PFR. PFR initiated a lawsuit against Dayton and its sole owner, Jacob, alleging breach of contract against Dayton and unjust enrichment against Jacob. During the discovery phase of the lawsuit, PFR discovered that Jacob and his family regularly used Dayton’s planes for personal use. Furthermore, PRF discovered that Jacob regularly transferred funds between his personal checking account and Dayton’s checking account, and often borrowed funds from Dayton without any evidence of repayment of the alleged loans. Consequently, PFR asserts that Jacob should be held personally liable for the \($248,000\) debt because his frequent withdrawing of funds from Dayton caused the company to have minimal assets. Do you believe PFR will be successful in pursuing its legal claims against Dayton and Jacob?

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Related Book For  book-img-for-question

The Legal And Ethical Environment Of Business

ISBN: 9781454893028

2nd Edition

Authors: Gerald R. Ferrera, Mystica M. Alexander, William P. Wiggins, Cheryl Kirschner, Jonathan J. Darrow

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