Define shareholder of cherokee investments corporation

Assignment Help Business Management

Reference no: EM13216151

Sam is a director and the majority shareholder of Cherokee Investments Corporation (CIC). Sam buys, for $1,500, an option to purchase a tract of real estate for $50,000. Sam forms a new corporation, Sam's Commercial Property, Inc. (SCPI), to hold the option. As the majority shareholder, and thus controlling director, of CIC, Sam orders CIC to authorize the purchase of the land from SCPI for $100,000. Sam then has SCPI buy the land and sell it to CIC, and loan the money to CIC for the purchase at a 10 percent interest rate. Olivia, a minority shareholder in CIC, complains to CIC's board, which takes no action. Olivia files a suit against Sam on CIC's behalf.
Will Olivia prevail? Explain your answer thoroughly.

Reference no: EM13216151

Questions Cloud

What is the probability he or she scores 750 or better : Suppose the graduate exam is normally distributed with a mean of 500 and a standard deviation of 200. If a test taker is randomly selected, what is the probability he or she scores 750 or better?

Quality control department and product improvement team : The Quality Control Department and Product Improvement Team at Aventis and the probability that a person did receive the vaccine and still got the flu

Explain data relating to the area and analyze consumption : Collect secondary data relating to the area and analyze consumption trends over the past five years. Decide on the outline of the report and its various sections.

Why content of management report might influence activities : Management reports have been a prominent topic the past few years. The term "Management Reports" can be understood in a variety of different contexts and applications. A management report is also included in the annual report to shareholders.

Define shareholder of cherokee investments corporation : Sam is a director and the majority shareholder of Cherokee Investments Corporation (CIC). Sam buys, for $1,500, an option to purchase a tract of real estate for $50,000. Sam forms a new corporation, Sam's Commercial Property, Inc. (SCPI), to hold ..

Determine how comfortable the shopper was in a store : the study obtained a measure to determine how comfortable the shopper was in a store. Higher scores indicated greater comfort. Suppose the following data were collected. Use a = .05 to test for differences among comfort levels for three types of b..

Explain about a foreign-based multinational corporation : Explain the mechanism that states use to prevent the double taxation of the income of a corporation doing business in two or more states. Does a state have the authority to require a U.S.-based multinational corporation to compute its state taxable ..

Explain costco performing from a strategic perspective : How well is Costco performing from a strategic perspective? Does Costco enjoy a competitive advantage over Sam's Club? Over BJ's Wholesale?

User Account

All Pages