Q1. Eric incorporated Viking with an initial capital of $3,000. Eric also made a $7,000 loan to Viking. Viking had as assets 65 lots of land held for development, which lots cost $430,000. Viking became unable to pay its creditors, who sought to pierce the corporate veil and hold Eric liable. Were the creditors successful?
Q2. A group of stockholders of Ono Development Co. and Ono East, Inc., brought suit, on behalf of themselves and the other stockholders of the corporations, and derivatively, on behalf of the corporations, against Pannell Kerr Forster, an accountingfirm, and two of its employees (the defendants) to recover damages for breach of contract and fraud. The stockholders alleged that the defendants had failed to disclose in annual audits of the corporations’ books that certain commissions were being improperly paid to, and by, three of the corporation’s principal officers and directors. As a result, the corporations had been deprived of the use of large sums of money over an approximate ten-year period. While the action was pending, the plaintiff stockholders all sold their stock back to the corporations. The defendants argued that the stockholders lacked standing to sue the corporations either on their own behalf or on behalf of the corporations. What should the court decide, and why?
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