Grandiose secured an option to purchase a tract of land for

Reference no: EM13596707

Grandiose secured an option to purchase a tract of land for $100,000. He then organized Dunbar Corporation and subscribed to 51% of the shares of stock of the corporation for $100,000, which was issued to him in exchange for his 3-month promissory note for $100,000. Controlling the board of directors through his share ownership, he had the corporation authorize the purchase of the land from him for $200,000. He made no disclosure to the board or to other shareholders that he was making a $100,000 profit. He promptly paid the corporation for his shares and redeemed his promissory note. A disgruntled shareholder subsequently learned the full details of the transaction and brought suit against Grandiose on the corporation's behalf. Which of the following is a correct statement?

Reference no: EM13596707

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