1. Mets, Inc. manufactures and sells baseball bats to the professional market while Phillies Enterprises manufactures and sells baseball bats to the collegiate market. Mets decides that it would like to expand its market beyond the pros and so decides to acquire Phillies Enterprises. The price for Phillies is relatively low since Phillies has been struggling with low sales the last several years. After the transaction, Mets, Inc. will have 30% market share of the baseball bat market. Both Mets and Phillies are competing with the largest company in the baseball bat market, Louisville Slugger, and Mets feels that this acquisition and resulting market expansion will make its strong business even stronger. Mets has never undertaken any other acquisitions but is large enough that it needs Federal Trade Commission approval for the transaction. Will the FTC approve this merger? Why or why not?
2. Azalea Enterprises is a retail florist specializing in weddings. As the summer wedding season approaches Rose Petal, the owner of Azalea Enterprises decides that she needs a loan to expand her business. Thus, Rose approaches Bamboo Bank for a $250,000 loan. The Bank agrees. The two parties execute an agreement that includes the following provisions:
Bamboo Bank (the “Secured Party”) shall secure the payment and performance of Rose Petal (the “Debtor”) promissory note in the amount of $250,000. Debtor hereby grants to Secured Party a security interest in all of the equipment used in Debtor’s retail floral business, Azalea Enterprises (the “Collateral”).
Debtor agrees to pay Secured Party equal monthly installments as established in the Promissory Note on the 1st day of each month.
Debtor shall be in default under this agreement upon any of the following:
Failure to pay the amount due within 10 days of the due date
Relocation of the Equipment without written notice and approval of the Secured party
Insolvency of the Debtor
Under state law (UCC Article 9), what additional steps must Bamboo Bank take to ensure that they are able to have first priority to seize the equipment as collateral?
3. Rose has an accountant, Steve Stem, who has prepared her financial statements and tax returns for years. During her investigation of the drop in sales, she also discovers that Steve has prepared her financial statements incorrectly for the last two years and also improperly calculated her income tax. As a result, Rose discovers that she owes the Internal Revenue Service an additional $20,000 in tax and late penalties. Does Rose have any recourse against Steve? Please include all elements for liability
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