Reference no: EM131660153

Question: Holder in Due Course. The Brown family owns several companies including J. H. Stevedoring Co. and Penn Warehousing and Distribution, Inc. Many aspects of the companies' operations and management are intertwined. Dennis Bishop began working for J. H. and Penn in 1984. By 1997, Bishop was financial controller at J. H. where he was responsible for approving invoices for payment and reconciling the corporate checkbook. In December, Bishop began stealing from Penn and J. H. by writing checks on their accounts and usually having one of the Browns sign the checks. Over the next two years, Bishop embezzled $1,209,436. He used $370,632 of the funds to buy horses from Fasig-Tipton Co. and Fasig-Tipton Midlantic, Inc., with Penn or J. H. checks made payable to those firms. When Bishop's fraud was revealed, J. H. and Penn filed a suit in a federal district court against the Fasig-Tipton firms to recover the amounts of the checks made payable to them. In whose favor should the court rule? Why? [J. H. Stevedoring Co. v. Fasig-Tipton Co., 275 F.Supp.2d 644 (E.D.Pa. 2003)]