Case Study In Pocketing The Greens Case

1885 Words8 Pages
POCKETING THE GREENS CASE STUDY 1. Immediate Issue(s) or Problem(s) In Pocketing the Greens case, Cheap Pharma Inc. (CPI), a pharmaceutical company specializing in generic drugs sued Mr. De Guzman and two other members of the Board of Directors (BOD) for profiting from the transaction they made with CPI’s competitor and potential business partner named Green Med (GM). The CPI’s shareholders are demanding Mr. De Guzman as well as the two other members of BOD to render an accounting and return whatever profits they made from their transaction with GM to CPI. Is CPI in the right position to do this? What duties do directors owe the corporation which they serve? In this case, CPI and GM are competitors. Both of them are pharmaceutical companies. However, CPI is suffering from low sales due to fierce competition. On the other hand, GM is an insolvent company who is famous for its innovative use of lagundi leaves in its cough syrup. Mr. De Guzman and the two other members of the BOD propose to buy shares of stocks of GM. According to Mr. De Guzman, CPI can make use of GM’s patents and develop new products which incorporate traditional herbal medicine with CPI’s existing product line. The BOD authorized Mr. De Guzman to negotiate with GM’s receiver named Dr. Gonzales. The BOD approved the purchase of the said stocks and even passed a resolution binding the company to pay 10 million for the shares. On the other hand, GM’s part through Dr. Gonzales agreed to sell shares of stocks

More about Case Study In Pocketing The Greens Case

Open Document