In Storetrax

question 223

Multiple Choice

In Storetrax.com v. Gurland, where Gurland, the founder of Storetrax.com, was removed as president but denied severance pay and sued for that, the appeals court held that he was:

• A) not due severance pay because he was a board member and that was a conflict of interest
• B) not due severance pay because he breached his obligation to the company while an officer and board member so lost the right to such compensation
• C) due severance pay promised as other members of the board breached their duties and so would be removed from the board in favor of control being vested in Gurland
• D) due severance pay promised as other members of the board breached their obligation to follow the bylaws of the company, so they could be personally liable to Gurland
• E) none of the other choices

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Definitions:

Subsidize

The act of providing financial assistance to individuals, businesses, or industries to support or promote economic activities.

Basic Research

Fundamental scientific research aimed at increasing understanding and knowledge, without specific immediate commercial applications.

Free-Rider Problem

A situation in which individuals consume more than their fair share of a public resource, or shoulder less than a fair share of the costs of its production, because they are not charged for their usage.

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be used by everyone and one person's use does not reduce availability to others.