Question #1(a)

Jessica, the owner of Plush Pizza, is a sole proprietor. Jessicawants to obtain additional capital to expand Plush Pizza, but sheis having difficulty getting approved for a loan from the bank todo so. She also doesn’t want to lose control over the management ofPlush Pizza. Jessica is contemplating converting Plush Pizza intoanother business form. What are Jessica’s best options forbusiness form to attain all of her goals of more access to capitalwhile retaining sole control over the management of Plush Pizza?Please explain why each option you describe for Jessica isappropriate. (5 pts)

Question #1(b)

Suppose in December 2014 Marco approaches Jessica and offers toinvest money in Plush Pizza to finance the opening of 20 new PlushPizza stores in southern New Jersey. Jessica agrees to convertPlush Pizza into a partnership and to accept Marco as apartner starting January 1, 2015. They agree that Jessica wouldmanage the northern New Jersey stores and Marco would manage thenew southern New Jersey stores. However, they do NOT sign apartnership agreement. In March of 2015, Jessica gets very sick, ishospitalized, and must be out of work for the remainder of theyear. She asks Marco to take over her management duties for thenorthern New Jersey stores. At the end of the first year ofoperations, Plush Pizza makes significant profits because thesouthern New Jersey stores are extremely popular. Marco claims thathe deserves 60% of the profits (and Jessica should get 40%) becausehe managed all of the company’s stores for most of the year becauseJessica was sick. Is Marco correct? Why?(5 pts)

Question #1(c)

In April of 2016, one of the Plush Pizza locations is runningbehind in pizza delivery orders. Jessica has now fully recoveredfrom her illness and is supervising this Plush Pizza location onthe day that the delivery orders are running behind. Jessicadecides to make some of the deliveries herself and rushes out thedoor to make the deliveries as quickly as possible to minimizecustomer wait times (and related complaints). On her way to make adelivery, Jessica hits Michelle, a pedestrian crossing the street,when she loses control of her car. Michelle breaks her back. It islater discovered that Jessica was driving above the speed limit inthe area and was texting her boyfriend while driving when theaccident occurred. Under what legal theory will Michellelikely bring suit against Jessica? Will Michelle succeed in herclaim against Jessica? Explain why or why not.(12.5 pts)

Question #1(d)

Can Michelle bring a claim against Plush Pizza for herinjuries suffered in the accident with Jessica? Explain youranswer. (5 pts)

Question #1(e)

Assume that Michelle successfully sues Plush Pizza andwins (and assuming all other facts about Plush Pizza set forthabove still apply), can Michelle seek to satisfy her judgmentagainst Plush Pizza by enforcing the judgment against Marco (andhis personal assets)? Explain why. (5 pts)

Question #1(f)

Would your answer to Question #5 change if Jessica hadconverted Plush Pizza into a Limited Liability Company (and bothJessica and Marco were members of the LLC)? Explain why or why not.(5 pts)