Last month, Jim Duncey, the majority owner and face of Duncey’s Caps, Inc., was involved in a car accident and arrested for DWI.   Facing a PR crisis Duncey’s board of directors called an emergency meeting.  The board implemented its crisis plan, issued a statement condemning driving while intoxicated, suspended Duncey, ordered him to attend rehabilitation, and made a $100,000 donation to MADD. 

While the company survived the initial PR crisis, its bottom line did not.  Retail sales during the following quarter were down 20%.  One of the company’s major commercial customers also terminated its contract that produced $3 million in revenue annually.  To make matters worse, the board’s private investigator discovered that Duncey had previously been arrested for DWI three years earlier while on vacation in another state, but had managed to keep it quiet.  Does the company have any legal remedies against Duncey on top of terminating him?  Should the company seek those remedies?
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Seeing the bottom line awash with red ink yet again, Susie Sears reluctantly decided to shut down her family-owned Widgets-R-Us.  Pressured by thinning margins, a weakening labor pool and increasing competition from foreign markets, Widgets-R-Us is leveraged to the hilt and profits are insufficient to pay even her secured debt. With no viable assets or business, there’s nothing to mortgage or to sell. How can Susie and her fellow company officers walk away without becoming personally liable?

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Board of directors member Y.I. Gnough, who is also president of Algae Company, is in a pickle. Although denying any knowledge of sexual harassment and misconduct by the company founder and deal-maker Iam Algae, three co-board members resigned fearing for their reputational and financial survival. Employees are fueling the rumors of women who complained of unwanted touching, sexual harassment and other over-the-line behavior. Even Algae’s former counsel discloses that several years ago the board and the company were told of three or four confidential settlements with women. Company investors suggest that Y.I. and fellow officers and directors breached their fiduciary duty. Should Y.I. be concerned about his pocketbook and his reputation?

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A number of years ago John Drane, owner of Drane Plumbing & Supply, executed a Power of Attorney (POA) naming his eldest daughter LaTrina Drane as his attorney in fact. John’s debilitating stroke last weekend risks placing him in rehabilitation for months. Determined to continue the family business that offers its customers “Let Us Drain Your Swamp,” LaTrina dusts off John’s POA. Will Latrina have any problems?
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