Bob files for bankruptcy with the following assets and debts. Categorize the debts and determine the order and manner in which they will be resolved.
Bank account with $450
Loan with an $8,000 balance secured by a boat that can be sold for $7,500-liquidation/secured debt
Legal fees for the bankruptcy of $300
Medical bill of $500-reorganization/non priority unsecured
Credit card with a balance of $500-reorganization/non priority unsecured
Essay:
One day over breakfast, Tom offered to buy Bob's cottage for $35,000. Bob responded that it would be nice to have the money since he would like to buy a new car. Tom grabbed a napkin and wrote down the following:
August 3, 2012
I agree to sell Tom my cottage for $35,000.
Tom handed the napkin to Bob who laughed at him but took the pen and signed it with a large, fancy version of his signature. Bob tossed the napkin back over to Tom, paid the bill, and left the restaurant.
The next day, Tom took a guaranteed check for $35,000 to Bob. Bob refused to accept it, insisting that he did not want to sell the cottage.
Analyze all of the potential legal issues in this case to determine the likely outcome if Tom files a lawsuit.
Essay:
After 20 years of working as a cook at a taco shop, Bob quit to start his own nursery and landscaping business. On his last day at Taco Loco, Bob took a few things to remind him of the place including his apron, a small food processor that he liked to use to make salsa, and a copy of the recipes for all of the menu items, which he had to sneak out of a locked cabinet in the owner's office.
Acme Homebuilders Inc. was Bob's first major customer. The company was building a large subdivision so they needed a lot of goods and services. Bob sold them 100 small trees for $2,500 and agreed to plant them for an additional $3,500. The deal was completed over the telephone. Bob sent an email confirming the details. In the email, Bob offered to have the trees delivered six months later, after the seeds he had planted that morning had time to grow to the required size. Tom, Acme's President, was very angry because he could not wait six months for the trees. He had customers who wanted to move into their new homes this month but would now have to wait longer because of the delay with the trees. The new homeowners have threatened to sue Acme. Tom refused to pay Bob, so Bob threatened to sue him.
Unfortunately, Bob did not have any money to pay a lawyer so he had to find a way to earn some fast cash. He considered asking Taco Loco for his old job back but then he remembered the things that he had taken with him on his last day. He called up Tacomania, Taco Loco's biggest competitor, and offered to sell them a copy of Taco Loco's recipes for $500. Dave, the owner of Tacomania, eagerly agreed to buy them. After making the agreement, Bob had second thoughts and refused to deliver the recipes. Dave is threatening to sue Bob.
Use what you have learned this semester to figure out the potential legal issues facing each of the individuals and businesses involved in this situation as well as which parties are likely to win.