Law and Corporate Managers – Prof. Larry Franklin

Question Two A. (i) For refusal
In order to honor the LC, the Seller has to comply exactly with the terms of the letter of credit. There are numerous typo errors in the LC and misspellings of the destination port and the Seller name, hence only a waiver of the discrepancies from JFTC will enable Bank of China to pay the Seller. As long as the waiver is not received, the BOC cannot make any payments. BOC has to state why it is not going to pay. The seller reviewed the LC before the shipment of goods, so it is his mistake that he didn’t point out the discrepancies.

(ii) Against refusal
Since the LC is irrevocable, then JFTC can't make any modifications or cancellation without the …show more content…
3. As an incentive to Bernie to attract him to act as a CEO of the corporation he can offer him ownership of shares. This is not possible in LP.

Question Four 1. The memo is legal according the local law. Nonetheless, a legal action may be unethical. The question is what is ethical, and if publishing the memo is an ethical action. In order to value the ethical aspect of the action we have to answer the following questions:

2.1. Is it legal?
Yes, under the Singapore law, members of investment banking firm are allowed to subscribe to shares in an IPO. The worldwide policy of the firm doesn’t make the memo illegal, rather than a violation of the organizational discipline.

2.2. Does it maximize the shareholder value?
The answer is not unequivocal. It is clear that the directors' obligation is to manage the corporation "for the best interest of the corporation". The board may legitimately consider not only the effect on shareholders, but also the effect on employees. The memo has a big effect on the employees, and in return the employees can be more devoted or committed to the firm. Therefore, this action has a potential to maximize the shareholders value, and the employees.

2.3. Is the action ethical?
Allowing the employees of the underwriter to own shares of the company they lead its IPC could be considered as a major conflict of interest issue. This decision may affect negatively the IPO, due to the fact the lead underwriter