BA 260 WEEK 6 BREACH OF DUTY
In the case of the Mississippi Beef Plant case, duty of loyalty was breached. Mr. Hall duties and obligation were to get the beef plant built and running based on the $22 million budget he estimated. This did not happen and initial estimated price rose to $55 million dollars upon completion. In this situation, the issue of self-interest arose in the form of Mr. Hall paying his family member nearly $45,000 dollars to act as a consultant on the project. Secondly, as a means of providing and supporting his family, and maybe for financial gain, Mr. Hall also gave $269,000 or fraudulent obtained grant money to other family members. To make matters worse, Mr. Hall also had the construction company building the beef plant to pay him a 1% consulting fee totaling $173,130 and allegedly had the same construction company to perform nearly $20,000 in work on his personal home. According to the article, nearly $270,000 in false invoices were submitted to the Mississippi Development Authority and Community Bank for equipment and other items and demanded more than a $87,000 payment for several other miscellaneous items. In the end, the plant only functioned for several months and shortly afterwards, Mr. Hall defaulted on the $35 million loan and the bank and the state were unable to sell the property. In the situation, Mr. Hall had a responsibility as a director to make financial decisions in regards to the project. Instead, Mr. Hall used the funds for personal gain. During the investigation of this case it was discovered that a breach of duty of loyalty occurred when Mr. Hall used funds for the project to make
No comments:
Post a Comment