Reference no: EM13467535

Back in his office, John Quick gets to work. John decides that his first priority is to find the funding for the project.  After careful review of the CCI budget, John decided that there are two ways he can raise the money for the project quickly.  The first way is to sell the 2.8 million dollar corporate apartment in San Francisco.  Overlooking the Golden Gate Bridge, this apartment should be very easily sold, even in today's market.  In fact, he thinks he knows the perfect person, Jack Yono.  Yono had called Quick only the last week and asked if Yono knew a place in SF for sale, as Yono was being transferred from Japan to the Bay area by his company.  Quick feels certain that Yono can afford the apartment and knows that Yono can save real estate broker-fees if the sale is direct to Yono. He picks up the phone and called Yono who was more than delighted to get the apartment for 2.8 million. He would wire him half of the money as a deposit this afternoon, and pay the rest when he got the contract of sale and Deed. It would be a cash transaction. John told him the documents would come via e-mail this afternoon after the deposit wire had been received. He could close the deal by tomorrow. Everyone was pleased when they hung up the phones.  Quick called the bank and arranged to set up a new account in the FAMUSA name.

The second part of John's plan was to fire two upper management people, Joe Jolly and Jill Jackal.  Joe was the Director of Sales and Dirk Driven's gopher.  The sales figures were down this year and this would be a perfect excuse to let him go.  CCI could save $450,000 dollars by letting him go and promoting his immediate underling with a salary bonus of only $100,000.  John wanted to make sure first that CCI wouldn't have any problems with his employment contract.  He pulled Joe's file and found that he was correct in surmising that he had signed one of the old contracts. He was bound to a six year covenant not to compete even if he was fired.  Furthermore, all disputes with the contract were to be handled through arbitration at Jolly's expense unless Jolly won. John was sure that wouldn't happen because CCI would get to pick the person. John decided if he let him go with two weeks notice and severance pay that would be enough to prevent any problems. What John forgot to check, because it wasn't in the new contracts, was the clause on dismissal of the employee.  It provided that when the employee was dismissed without thirty days notice and severance pay, any disputes would revert to the Court system for resolution.

Jill Jackal, though, was another matter.  She had negotiated her own contract and was sharp and talented. Her, "Cow Time," cartoon is a real hit. It brings millions to the company each month. Dealing with her would prove a headache for sure.  Quick needed her $500,000 salary. Fortunately, for him, Jill entered his office at the moment and informed him that she was resigning her position as Creative Director.  She was giving her two weeks notice.  She also said that she wanted the $100,000 per month "Cow Time" royalty checks that Troll had promised her last month.  The royalty checks were to begin that same month and continue as long as, "Cow Time," was used by CCI.  Quick wanted to laugh. Troll was always making promises like that to people, but he never paid. He said nothing.  At least he no longer had to fire her.

John had one last thing to do before he could go home for the day. He had to get the corporation for FAMUSA formed.  Normally, he would have gotten legal to handle this, but they had gone home for the evening. He would just take one of the corporate books from the shelf and scan the documents into the computer. He would edit the existing name and put Fun-A-Mania-USA in its place.  He names Troll, Driven and himself the shareholders and Board of Directors with the thought that this could be changed later to CII when the Board approves the park plan.  He had accomplished the job Troll gave him in one day.

The Board of Directors, now very much aware of FAMUSA plan, and not too happy, come to you for advice.  They want your legal opinion on the following questions.