Assignments & Exam

Please use the tabs to get at the various exam pages.

Below are the two assignments in the course.

ASSIGNMENT #1 (Due by 9 AM Monday October 24, 2016)

It is the present day. You are a young corporate lawyer at the well know British Columbia law firm Wie, Haight, Raye & Darr whose primary practice is maritime insurance litigation. In fact you are the only one in the firm with any knowledge of corporate law. One of the senior partners Sonny Raye comes to your office  (proving this is all fictional because he would never come to your office) and says:

“We have just been retained by the giant worldwide conglomerate Hexxon Oil & Gas because their oil tanker the Hexxon Valdez struck a reef in Prince William Sound, Alaska this morning at 12:04 a.m. local time. Our information is that the ship was carrying approximately 55 million gallons of oil of which approximately 11 million gallons (approximately 250,000 barrels) are going to be spilled into Prince William Sound over the next few days.

It gets worse. The Master of the Hexxon Valdez Captain Joe Hazelwode was widely reported to have been drinking heavily last night and was asleep in his bunk when the ship hit the reef. The third mate was at the helm. You might think he would not have hit the reef if only he had looked at the ships radar. Except that the radar wasn’t even turned on. Our client has told us that they have known for the past year that the Hexxon Valdez’s radar has been broken and disabled. It was in our client’s view just too expensive to fix and have operational.

Our client Hexxon’s full name is the “Hexxon Trading Corporation” and it was originally chartered on May 2, 1670 in London, England but became a Canadian company in 1965 and is currently a Company under the Canada Business Corporations Act (R.S.C., 1985, c. C-44).

The ship “Hexxon Valdez” was registered in the country of Liberia. It is owned by “Valdez Ltd.” a Liberian Corporation.

The shares of “Valdez Ltd.” are held in equal proportion (50% interest each) by two entities. The first is a limited liability partnership known as the “666 Limited Liability Partnership”. The Managing Director of “666 Limited Liability Partnership” is ”Hexxon Experts Inc.”, a 100% owned subsidiary of “Hexxon Trading Corporation”. The partners of the “666 Limited Liability Partnership” are four international investment firms and the “Hexxon Trading Corporation” in equal proportions (20% interest each).  The other 50% shareholder in “Valdez Ltd.” is “Hexxon Trading Corporation B.C. Inc.”, a B.C. Company incorporated pursuant to the Business Corporations Act [SBC 2002] Chapter 57. “Hexxon Trading Corporation B.C. Inc.” is a wholly owned subsidiary of “Hexxon Trading Corporation”.  The Board of Directors of “Valdez Ltd.” is comprised of 6 Directors, 3 appointed by the “666 Limited Liability Partnership” and 3 appointed by “Hexxon Trading Corporation B.C. Inc.”. The Directors appointed by “666 Limited Liability Partnership” are all “independent directors” having no connections to Hexxon, its subsidiaries or affiliates. The three directors appointed by “Hexxon Trading Corporation B.C. Inc.” are comprised of the CEO of the “Hexxon Trading Corporation”, the VP Finance of the “Hexxon Trading Corporation” and one “independent director” having no connection to Hexxon, its subsidiaries or affiliates. “Valdez Ltd.” has never made a profit, but before the accident “Valdez Ltd.” was projected to become profitable in fiscal 2015.

There is one further fact. Captain Hazelwode is an independent contractor, not an employee of Valdez Inc. He is the sole shareholder and sole director of “Hazelwode Captainry Ltd.”, another Liberian company.

Our client Hexxon knows that it is going to be sued in British Columbia for negligence by individuals and businesses who have been disrupted by the spill including the Alaskan seafood industry, property owners and environmental groups. We are expecting approximately 38,000 plaintiffs. Hexxon’s overall strategy is to blame Captain Hazelwode as much as possible.

The firm and our client would like your preliminary assessment of what corporate law defenses we might have. We know that you are not very experienced in the area so all we really need is a point form list of questions and observations regarding the corporate law principles that might apply to provide us with some defenses based on corporate structure, and/or deny us those defenses.

If you think that there may be further facts that it would be either helpful or important to know, indicate briefly what they are. As well, please try and limit your memo to no more than four pages or less (one and half spacing).”

ASSIGNMENT #2 (Due by 9 AM Monday November 21, 2016)

You are a young corporate lawyer at the well-known British Columbia law firm Wie, Haight, Raye & Darr. The firm’s client Gates Williams makes an appointment to meet with you. He arrives at your office with J.O.B. Steves whom he introduces as his partner in a new venture. Mr. Williams asks you to incorporate a new company under the BCBCA.

They tell you that the company is being formed to exploit a potentially highly profitable new business opportunity that has arisen as the result a decision by the Canadian International Development Agency (“CIDA”) an agency of Canada’s Department of External Affairs to invite tenders from private sector companies for contracts to provide services that CIDA wishes to have provided in Guatemala. Mr. Williams mentions that Mr. Steves’ son-in-law is a very senior official at CIDA.

Mr. Williams that the shareholdings in the new company will be as follows:

1. Gates Williams 1000 Class A Voting common shares to be paid for in cash
2. O.B. Steves 1000 Class A Voting common shares to be paid for in cash
3. C. Ahn 100 Class A Voting common shares (who is not at the meeting) to be paid for in cash

Mr. Williams asks you whether Wie, Haight, Raye & Darr would take 200 Class A Voting common shares in lieu of fees.

Since Mr. Williams and Mr. Steves are in rather a rush they tell you that the company should have standard form articles along the lines of the model BC Articles (on TWEN), that Mr. Williams will be the sole officer and director of the company and that Mr. Steves will call later with additional instructions and information. Later the same day Mr. Williams (not Mr. Steves) calls and asks you prepare an employment agreement between Mr. Williams as President & CEO, and the new company. The employment agreement will have a term of two years and provide a salary of $500,000 per year.

Please identify briefly any legal or, in the light of the following provisions of the Law Society of BC Code of Professional Conduct, any ethical issues: s. 1.1-1 (definition of “conflict of interest”); s. 3.2-7; s. 3.2-8; s. 3.4-1; s. 3.4-28.

Please answer in three pages or less (one and half spacing). It is not necessary to repeat the facts.