issue: rules and laws: application: concussion:

While at home, Sam Smith, the president and chief executive officer of ABC, Inc., is called by the CEO of Acme Corporation, who asks whether ABC would be interested in buying about 25% of the outstanding shares of Acme. ABC is a billion dollar conglomerate that has eyed Acme for some time, however, it doesn't presently have the cash available to make this purchase. Smith tells Acme's CEO that ABC is not interested, but that SmithCo, is willing to buy the shares. Smith is the 100% shareholder of SmithCo. Acme sells the shares to SmithCo for $35 million. A year later, SmithCo sells the shares for $55 million to a mutual fund company. When ABC's directors discover SmithCo's purchase and sale of the Acme shares, they sue Smith on behalf of the corporation. Will they recover? Discuss fully using the IRAC method