Reference no: EM13781373

1. Lawrence Gaffney was the president and general manager of ideal tape company (ideal). Ideal which was a subsidiary of Chelsea industries, inc. (Chelsea) was engaged in the business of manufacturing pressure-sensitive tape. Gaffney recruited three other idea executives to join him in starting a tap manufacturing business. The four men remained at ideal for the two years it took them to plan the new enterprise. During this time, they used their positions at ideal to travel around the country to gather business ideas, recruit potential customers, and purchase equipment for their business. At no time did they reveal to Chelsea their intention to open a competing business. The new business was incorporated as action manufacturing company (action). When executive at Chelsea discovered the existence of the new venture, Gaffney and the others resigned from Chelsea. Chelsea sued them for damages. Who wins?

2. Edward Hellenbrand ran a comedy club known as the comedy cottage in Illinois. The business was incorporated with Hellenbrand and his wife at the corporation's sole shareholders. The corporation leased the premises in which the club was located. Hellenbrand hired Jay Berk as general manager of the club. Two years later, Berk was made vice president of the corporation and given 10 percent of its stock. Hellenbrand experienced health problems and moved to Nevada, leaving Berk to manage the daily affairs of the business. Four years later, the ownership of the building where the comedy cottage was located changed hands. Shortly thereafter, the club's lease on the premises expired. Hellenbrand instructed berk to negotiate a new lease. Berk arranged a month-to-month lease but had the lease agreement drawn up in his own name instead of that of the corporation. When Hellenbrand learned of berk's move, he fired him. Berk continued to iease the building in his own name and opened his own club, the comedy company Inc, there. Hellenbrand sued berk for an injunction to prevent berk from leasing the building. Who wins.