Mia Massoud - 20151067

Instructor: Marilyne Karam

Business Law Final - Spring 2020

I. The court took its decision without considering the current situation that is not
only attaining Brothers Electronics, but rather the whole world. As a plus, it
totally ignored the Lebanese’ current economic situation which hurts the importers
who rely on USD.
- Competent authority: the contract states that disputes between the parties
should be settled in the Korean court KCAB. But the Lebanese law states that
these times of disputes should be settled in the place where the commercial
activities done by the executive distributor: in this case, the competent
authority is the Lebanese court.
- Legitimacy: it is unethical to penalize a company for not generating enough
revenue and not performing well in a situation as such, especially in Lebanon.
The company is drowning in a revolution, an economic crisis, and a pandemic
situation; therefore, customers are trying to save as much as possible and are
not spending a dime unless they absolutely have to. The products offered by
LG are not essential goods, hence it should not decide to terminate the contract
based on the current situation.
- Legality: the Lebanese law states that the supplier does not have the right to
terminate the contract the reason being that the distributor is not performing
well due to an economic situation in his country. Therefore, LG cannot decide
to terminate the contract with BE since this last is located in Lebanon and
currently Lebanon is going through a bad economic situation on the verge of
collapse.
- Potential remedies: LG can terminate the contract and pay indemnities as
required by the law since the reason for unproductivity is the Lebanese
economic situation as mentioned above. A second option would be for LG to
keep the contract and wait until things get better.

II.
a. Adam’s advice to Sami was a bad one: Sami has already written his name and
signed on the check, so it was not stolen; plus, the seller already endorsed it to
a third party, meaning that the check is not lost either. What’s more is that a
stolen check cannot be a probable cause for objection: as a matter of fact, the
objection can happen in 2 cases only: loss or bankruptcy of the owner.
b. The seller knew about the check and that the buyer did not have the amount in
his account. This was made clear by Sami since he asked him directly not to
present the check before 10 days. Although the seller has the right to endorse
the check in general, in this case he shouldn’t have done that, especially the
second day. As a plus, the seller risks jail time (3 months to 3 years) or a fine
 same as the drawer according to the criminal law since he knew about the
check.
c. Yes, the check can be endorsed many times. There are no rules against it.
d. It is the right of the last holder to protest against the drawer as well as the
seller (since he is an endorser who knew that the account had no provision) in
from of the courts within a time frame of 8 days. The money will not be
collected since the drawer does not have the amount in his bank account.

III.
a. The conditions for bankruptcy of Bank Intra are available in this case, and
they are the following:
1. The Bank is a joint stock company
2. Bank Intra stopped paying: it couldn’t pay its debts and bills, started to
lay off employees for incapacity to pay their salaries, and the checks
issued from it lacked sufficient provision.
3. Bank Intra’s debts are commercial debts and they are due. As a plus,
the amount of the company’s debt is known.
Had Youssef Beidas and his partners proved to have made serious
management mistakes that led the bank to bankruptcy, we could declare their
bankruptcy as well. Otherwise, in a Joint Stock Company, the debt is limited
to the company and not the shareholders.
b. The claim of the Mass of Creditors is right: according to the law, the bank
should stop its activities and is not allowed to sell its assets or receive
payments for commercial activities since it has been declared bankrupt.
Therefore, the court will cancel this action (as if it never happened) and return
the building back to Bank Intra.
c. Five large bankruptcies in the last 10 years:
1. Borders filed for bankruptcy in 2011. It was a book store with $1.42
billion in total assets.
2. ResCap went bankrupt in 2012. It was a real estate finance company. It
had $15.7billion in total assets and $15.3 in total debts.
3. RadioShack went bankrupt in 2015. It had high debts and was required
to liquidate. It had $1.59 billion in total assets.
4. A&P filed for bankruptcy in 2015 also. It was a chain of supermarket
and had total assets of $1.6billion.
5. In 2019, WOW air, the airline company that used to give the cheapest
flights from the USA to Europe declared its bankruptcy.

IV.
a. According to the Lebanese law, in a Lebanese Joint Stock Company, at least
1/3 of the members of the board of directors must be Lebanese. They have
only names Rami as a Lebanese member of the board against 3 foreigners,
which means that they are not abiding by the conditions that the law has set.
 As a plus, they failed by naming the BOD for 6 years whereas the law says
that it should be a maximum of 5 years.

b. The company lost 85% (>75%) of the capital. Therefore, the board must call
the shareholders for a special (extraordinary) meeting in order to either
dissolute, decrease capital, or take any appropriate measure to fix the issue.

c. This meeting included 66% (51% Rami + 10% Hiba + 5% Rania). It is below
the percentage of attendance required by law which is 75%.

V. Rola has 2 conditions: no partners and the protection of her personal assets.
Therefore, the best option would be to advise her to establish a Limited Liability
Company. This last allows Rola to be the only owner and limits the liabilities to
the company, meaning that her personal assets will be safe. A limited liability
company (L.L.C.) represents a private entity whose owner(s) is(are) only
responsible to the extent of the amount invested in the company when it comes to
corporate debts. The only disadvantage is that this form of business is more
expensive to form as compared to sole proprietorships. But since this last would
be going against Rola’s wishes, I would suggest for her to stick with the limited
liability company if I were her lawyer.