Each question is hypothetical and is based in the US.

1.Lara Cross is the owner of MoutainHomeFurnishing, Inc. (MHF), a small, closely held corporation. She started the company with $1000 capital and used the company's bank account as her own and regularly took home furnishings from the store. After several accidents where chair legs bought at MHF were falling off, a number of customers sued MHF. However, because Lara spent most of the company's money and had let its insurance policy lapse, the customers wanted to hold her personally liable. MHF soon filed for Bankruptcy. In court, Lara pleaded that because MHF was a corporation and she was only a shareholder, she was not personally liable for the debts and obligations of the company. How would you decide the case if you were the judge? Explain.

2.Hirbod Motors Company's Board of Directors (BoD) is considering shutting down its production line for SUV Model X.The profit margin on the product have been shrinking and the product is becoming extremely costly. Eventually, in a meeting BoD decides that discontinuing the product would free up resources necessary to focus on more profitable areas. However, majority of the shareholders of Hirbod (mostly business professionals and wealthy investors) predict and believe that the product will prove very profitable after minor changes in the design of the SUV Model X. They predict so based on a competitor's company, experiencing the same issue with one of their SUV models and fixing the problem with minor design changes. Since the shareholders firmly disagree with the Board and believe that the Board's decision will adversely affect the future of the Company, they decide to file an injunction against Board members on behalf of the Company to stop shutting down the production line. What advice do you have for the Board members? Explain.