Law Case Studies
Case #1
There are three points to be made about case number one: 1) whether purchasing inventory is acceptable three weeks before declaring bankruptcy, 2) whether Arthur could make a $400 donation to American Cancer Society, and 3) whether Arthur could pay $300 for the current electric bill.
Point 1 -- The trustee would not likely to be able to set aside the purchasing of inventory since Arthur is attempting to run a business, that is assuming that the inventory was necessary for the business to continue to run. Arthur was petitioned into bankruptcy, he did not do so willingly, therefore he should be able to continue to make purchases of inventory.
Point 2 -- The trustee would be able to set aside the $400 donation made to the American Cancer society because that was not a necessary business expense. It could be conjectured that Arthur was only attempting to give the money away instead of paying his creditors. Consideration of this transaction would likely depend on how long before being forced into bankruptcy did Arthur make the contribtion.
Point 3 -- The trustee would likely not be able to set aside the payment of the current electric bill since it is an ongoing expense of the business.
All three of these points are contingent on what type of bankruptcy Arthur is being forced into.
Case #2
Point One - Carter exceeded his authority by purchasing an antique desk for $3,000. He was under explicit instructions to not exceed $1,500 for any one piece. Assuming that his contract with Baker Antiques states that he not exceed that amount, he would more than likely be on the hook for the $3,000.
If the desk is returned to him in the same shape as when he purchased it, then it is likely that he...
(At least he has a desk that he can then sell for $2,500 -- thereby reducing his loss).
Case #3
Point One -- Ownership of a property is usually determined by the recording of the deed, Ulysses is more than likely out the money he paid to Gordon to purchase the property. The lease payments help lessen this loss, but probably not nearly enough to make Ulysses happy.
Point Two - Ulysses is not responsible for the past-due taxes, or any fines or interest charged on those tax dollars. Since he does not retain any ownership in the property due to the non-recording of the lease, legally he cannot be required to pay property tax on a property he technically did not own.
Ultimately, Gordon is responsible for the taxes, while Cheryl retains rights of ownership to the property.
Case #4
Point One - In the case of Fred and Mary, when Fred died he had not changed his will having left everything to his mother. Mary is correct in believing that she is due some of Fred's estate. What (and how much) she is due depends on the "spousal share" laws of the specific state in which they had shared a married life.
Point Two - As for the children that Mary and her second husband adopted; they can receive property based upon his will, especially since Mary is still alive and can give them whatever she desires. Whether the children can receive anything from the estate depends again on the state laws in which they reside.
A word of advice to Mary would be to ensure that any distribution of joint property is clearly indicated by a will (especially since she keeps losing husbands).
Case #5
Point One -- Cruse may have been entitled to be reimbursed the $2,125 as long as she can…
