1. Richie and Roger's operation, now known as Super Fun Video Editing and Graphics ("SFVEG"), survives the reorganization and the hacking episode and enjoys a year of record sales. Richie and Roger buy three more computers, another warehouse, and hire six employees to assist in the operation. The first two employees, Yolanda and Tiago, are taught how to run the software, trained on company protocol, and sent to run a video editing operation on a film set in Norfolk.

Yolanda and Tiago are young, and at times they are immature and unprofessional. Tiago gets angry at a grip on the set, Stuart, and shoves him. Stuart is hurt and goes to the hospital and gets checked out. Stuart sues SFVEG for payment of his medical bills. Is SFVEG liable for the damages caused to Stuart? Why or why not?

Yolanda, working the cameras on set one afternoon, gets into an argument with an actor, Gus, who says that his dialogue was cut off by Yolanda's faulty editing. Yolanda, feeling insulted, swings the camera wildly and accidentally strikes Gus. Gus is taken to the hospital and is treated for severe injuries. He sues SFVEG for payment of his medical bills, lost wages, and pain and suffering. Is SFVEG liable for the damages caused to Gus? Why or why not?

2. SFVEG's expansion has not been successful. The employees hired and equipment added to the operation have not increased the operation's revenue enough to offset the added expenses. Richie and Roger are having trouble paying their bills on time and in full. Bradley, who trained Richie and Roger in proprietary film technology and software, is suing them for theft of trade secrets. Additionally, the bank that owns the promissory notes for the warehouses has not been paid in several months.

Richie has taken on a second job as night manager at Saul's Pharmacy in order to make ends meet. The bank finds out about Richie' second job and begins calling him at work to ask about the money they are owed. Is the bank permitted to call Richie at work? Why or why not?

In order to pressure Roger into making payments, the bank finds out the contact information for Roger's friends and neighbors. They call Roger's friends and neighbors and tell them that Roger is a loser who can't pay his bills. Is the bank permitted to call Roger's friends and neighbors about his debts? Why or why not?

3. SFVEG has entered a downward spiral. The company's debts are piling up, revenue is down, and lawsuits are accumulating. Faced with little prospect of financial success, Richie and Roger decide to wind down the business.

Depending on how the business might have been reorganized in question 7(a) above, describe the process by which the business can be wound down.

Richie and Roger are concerned that some of the creditors of SFVEG and claimants against SFVEG may try to come after them personally after the business is closed. What sort of bankruptcy protection can Richie and Roger, as officers of SFVEG, seek against the debts of the company? Describe the type of protection provided, and the manner in which the Court will dispense with the debts.

Answer rating: 100% (QA)

1 Liability for Stuarts Injury SFVEG may be liable for Stuarts injuries if it can be proven that Tiagos actions were within the scope of his employmen... View the full answer