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IRAM IRAM
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3 years ago
Ping was the president and chairman of the board of directors of Oh Imports, Inc Ping was also a major shareholder. Acting as president, Ping negotiated a series of contracts that caused the corporation serious economic losses. In this role, Ping failed to exercise the care of a reasonably prudent person acting in similar circumstances. When substantial economic losses began to pile up, Ping insisted that the corporation breach a contract with Ory in favor of a larger contract that was later entered into with Magnificent Enterprises. Ping hoped to reverse Oh's economic fortunes through this contract with Magnificent, but the attempt failed. Oh then became insolvent. Ultimately, the corporation failed. Two law-suits were initiated against Ping. In the first, a creditor of Oh who never was paid because the business failed sued Ping alleging that the negligence of Ping had caused Oh to fail to pay the creditor what was owed. The second lawsuit instituted by Ory claimed damages from Ping because Ping caused Oh to breach its contract with Ory. Decide both lawsuits.
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umass508umass508
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3 years ago
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Management is not liable to third persons for the effect of their management or advice on such third persons. Officers and directors are not liable to outsiders for loss caused by the negligent performance of their duties as officers or directors. Similarly, officers and directors are not liable for the economic consequences of their advice on third persons, even if they cause the corporation to breach a contract with such third persons, provided they acted in good faith to advance the interests of the corporation. Ping has no liability in either lawsuit.
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