Bankruptcy Conference Case Problem Series

Posted by Qi Zhou.

In an article by Aaron S. Applebaum, Eastern District of Pennsylvania Bankruptcy Conference Case Problem Series: Eagle Technologies, describes the bankruptcy case of a fictitious sports equipment company founded by former professional football players “Carson” and “Fletcher.”

Carson and Fletcher retire from lucrative professional football careers and decide to go into business for themselves. They form Eagle Technologies, LLC, a Delaware limited liability company, in which Carson and Fletcher each hold 50% membership interests.They perceive an untapped market for improved football helmets. Carson creates new helmet designs while Fletcher looks for funding. Carson soon realizes, however, that without medical training, he cannot tell if the new helmets are actually safer. Investors suggest Carson and Fletcher invest their own money into years of R&D, and come back when they have a product ready.

Carson and Fletcher confer and decide to turn to Plan B. Instead of designing new helmets, they will duplicate an existing design and find a way to build it more cheaply. Carson gets a computer hacker to steal proprietary designs from a chief competitor, Giant Helmets, Inc., and Fletcher develops contacts with companies overseas who can develop components to mirror the stolen designs at a fraction of the cost incurred by Giant. They take their “new design” and supply contracts to an institutional lender, Cowboy Bank, N.A. Cowboy sees potential, and signs a letter of intent to loan $100 million to Eagle, secured by substantially all of Eagle’s assets and personally guaranteed by Carson and Fletcher.

Eagle submits its design to the patent and trademark office, and Fletcher bribes the patent office to obtain approval. With patent and apparent CPSC preliminary approval in hand, Cowboy funds the loan and Eagle is off and running. Eagle puts the stolen designs into development, and by outsourcing all components of the equipment, Eagle easily undercuts Giant and all its other competitors. and successful business.

Unfortunately, Giant sues Eagle, Fletcher and Carson for patent infringement, conversion and a host of other civil causes of action. Eagle also finds itself as a target of multi-district class action litigation, as the cheap foreign parts were poor substitutes for the quality components usually used in Giant’s helmet designs, and football players started experiencing worse and more frequent brain injuries than ever before. To top it off, the Federal Government commences criminal prosecution against Carson, Fletcher, Nelson and Kelsey as questions arise concerning Eagle’s CPSC approval process. Eagle’s mounting legal expenses put a strain on liquidity, and Eagle misses two scheduled loan payments to Cowboy.

Qi is an accounting major at the Stillman School of Business, Seton Hall University.

Betting on Covid

Posted by Miguel Mendez Perulles.

The managers of Tyson’s largest pork plant in Waterloo, Iowa, were alleged to have been betting on the amount of reported COVID-19 cases within the plant. Since the allegations came out these supervisors have been suspended as investigations, lead by former US attorney general Eric Holder, continue. The CEO of Tyson Foods has come forward and stated that he is “extremely upset” about the allegations, commenting that if these claims were to be accurate, then new practices would be implemented to solve this problem. Tyson has not yet disclosed the names of the managers involved in these allegations.

Allegedly, one of the plant managers by the name of Tom Frank “organized a cash buy-in, winner-take-all betting pool for supervisors and managers to wager on how many employees would test positive for COVID-19.” Demonstrating extreme negligence in his role as a supervisor during the COVID-19 pandemic. This betting allegedly began last spring, during which more than one-third of the plant workers became infected. Managers at the plant pressured employees to continue working even if they demonstrated COVID symptoms. One of the plant managers, John Creasy, allegedly told the employees that the virus was “no big deal,” even calling it a “glorified flu.”

Mel Orchard is the Plaintiff’s attorney representing: Sedika Buljic, Reberiano Garcia, Jose Ayala Jr., and Isidro Fernandez. This case has also gained support from The United Food and Commercial Workers International Union,” which has condemned the actions of Tyson’s Waterloo plant. Governor of Iowa Kim Reynolds commended the Waterloo Plant for implementing proactive safety measures. The Iowa OSHA (Occupational Safety and Health Administration) stated in June that they had found zero violations in their April 20 inspection. Tyson Foods requested the case to be dismissed after the plaintiffs could not prove the employees became infected at the plant.

Miguel is an accounting and finance major at the Stillman School of Business, Seton Hall University, Class of 2024.

Works Cited

Foley, Ryan J. “Tyson Suspends Iowa Plant Managers amid Virus Betting Claim.” AP NEWS, Associated Press, 19 Nov. 2020, https://apnews.com/article/iowa-tyson-plant-managers-virus-bet-law-f9a4556fdd253a7ae1787039e248879a

Tyson Foods – Lawsuit Alleges Managers Bet on Workers Getting Covid

Posted by Nicole Caldera.

A recent article from CNBC News states that Tyson Foods, one of the United States’ leaders in the pork plant industry, has suspended employees for allegedly betting on how many of their workers will contract Covid-19. These allegations came about after a worker filed a lawsuit against Tyson Foods because his son died from contracting Covid-19 at the Waterloo Plant back in April. This worker was upset to see that people were betting on how many workers would get sick, and he then filed a lawsuit stating that the company was allowing sick people to continue working and not following the state Covid-19 prevention guidelines, therefore creating unsafe conditions for employees to work.

After an interview with the company, CNBC News claims that the lawsuit filed states, “Covid-19 infected more than 1,000 employees out of about 2,800 at the plant, and five died.” The suit centers around the fact that Tyson continued to allow sick workers to work during their most severe outbreak in April. This was most likely how the worker’s son contracted Covid-19. Since Tyson, did not follow the guidelines, five of their workers died and now that they are taking bets on how many workers will contract the virus. This negatively impacts the company’s reputation indicating that they are not taking the pandemic seriously.


Since the Waterloo Plant is the largest producing pork plant in the United States, they were not able to shut down completely. Tyson’s manager decided to work with former United States Attorney General, Eric Holder, to conduct an investigation and provide a proper response. In response to the allegations, Tyson is suspending employees who participated in the illegal betting, making sure that the Waterloo plant enforces all of the basic Covid-19 safety guidelines, and not pressuring sick individuals to come to work. With the help of Eric Holder, these guidelines should be enforced and hopefully prevent the spread of Covid-19 in major workforces.

Nicole is a marketing major at the Stillman School of Business, Seton Hall University, Class of 2023.

https://www.cnbc.com/2020/11/20/tyson-foods-suspends-employees-after-lawsuit-alleges-managers-bet-on-workers-catching-covid.html

Racial Equality and Diversity

Posted by Kangyi He.

According to this current news story, the governor of California signed a law on corporate boardroom diversity. The news mainly presented that “hundreds of California-based corporations must have directors from racial or sexual minorities on their boards under a first-in-the-nation bill signed Wednesday by Gov. Gavin Newsom(California governor signs corporate boardroom diversity law).”There is no doubt that there are two sides to any action. On the one hand, there will be strong supporters. On the other hand, there will also be some people opposed.

Firstly, such diverse business legislation has been enacted in previous years, but this year California will force some companies to hire female directors and promote racial equality and diversity. Supporters say the new business law goes a step further in racial equality, and that all corporate boards in California now better reflect equality, despite previous efforts at the leadership level to eliminate implicit bias. For businesses, racially diverse boards are more advantageous than those lacking diversity. This measure showed a fact that “by the end of 2021, the more than 660 public corporations with California headquarters must have at least one board director from an “underrepresented community,” according to the measure(California governor signs corporate boardroom diversity law).” It is meaningful and important for a company to have different opinions on its board of directors. According to the opinion of the only official opponent in the legislative analysis, “he objected that that bill, coupled with the existing diversity law, would make it more desirable for corporations to pick women who also are members of the underrepresented communities to simultaneously meet both sets of quotas, to the detriment of men or women who do not meet the qualifications in the new bill(California governor signs corporate boardroom diversity law).” In other words, this measure may damage other people’s rights.

In conclusion, the law in the business has played a win-win role. On the one hand, it has greatly promoted racial equality among corporate directors and endowed people of different races with more equal business status. Secondly, the diversification of the board of directors is conducive to the comprehensive development of corporate culture, decision-making, policy, operation, and leadership, injecting fresh ideas into enterprises and promoting the development of business.

Kangyi is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2021.

Work Cited

“California governor signs corporate boardroom diversity law.” Fox Business, October 1. https://www.foxbusiness.com/business-leaders/california-governor-signs-corporate-boardroom-diversity-law

Child Labor Laws Should Be Taken Seriously

Posted by Dongsheng Xu.

According to an article published on Fox News on September 15th: McDonald’s franchises in Idaho have been punished in 11 locations for violating the child labor law.

According to Labor department, the operator and owner of the franchisee: Darmody Enterprises L.T.D,violated the local labor law. According to the article: “Darmody allowed its employees, ages 14 and 15, to work shifts that lasted longer than three hours, or extended beyond 7 p.m. on school days. On non-school days, the franchisee allegedly allowed its workers who fit that age range to stay on the clock for more than eight hours. The alleged violations were made at locations in Meridian, Boise and Nampa.”

This incident reflects that some businessmen ignore the law for money, and the idea of ​​money first is a very serious problem. It is very inhumane for them to hire children under the age of 16 to work continuously for 3 hours for short-term benefits. Facing the allegations by the Ministry of Labor, Darmody Enterprises L.T.D wrote in an email statement that they will compulsorily conduct training for employees in order to comply with laws and regulations. These will not change the fine he faces.

I think that companies and operators in all walks of life should always abide by child labor law. Because the work intensity of all walks of life in society is different, sometimes child labor cannot bear the work pressure, and they are overloaded every day, putting child labor in a painful situation, which is physically and psychologically devastating. Child labor law are beneficial to protect the lives and health of minors; to protect the right to education of minors and to promote the implementation of education; to improve the quality of minors and to contribute to the prosperity of all walks of life in society. This typical business behavior that does not comply with the law should be severely punished by the law, and McDonald’s should also strictly audit franchisees, and should not ignore this review, so as not to damage the company’s reputation.

Dongsheng Xu is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2021.

Source: https://www.foxbusiness.com/lifestyle/idaho-mcdonalds-child-labor-law-violations

Imitation is the Sincerest Form of Flattery

Posted by Nicholas Minikel.

The quote from Charles Colton can be easily applied here because Warren Lotas was almost exactly copying Nike shoes. The problem here is how truly similar the shoes are because it is so obvious that Warren Lotas is copying Nike because they put a Nike logo on their own shoe. Nike is a brand that is willing to engage in Lawsuits to defend the brand. This includes defending themselves and not giving and dealing with issues outside of court rooms as well as dealing with issues inside court rooms. This issue is a perfect example of when Nike is simply unwilling to let an issue go. Nike is willing to engage in lawsuits with some of the best athletes in the world including Kawhi Leonard and if they are willing to do this then no lawsuit is out of bounds for them. The issue of stealing the looks of shoes is extremely important because the quality of a Nike shoe compared to its competitors is almost nothing. However, what helps separate Nike from other companies is its ability to make fascinating shoes. If Nike were to allow competitors to steal the look of their shoes the business could lose a lot of money. This lawsuit is important for Nike because it needs to show its competitors that if they steal the looks of a Nike shoe they will be sued for a lot of money. “Nike is seeking three-times the damages incurred, profits from Lotas’ sales, and reimbursement of lawsuit and attorney fees” (Jones 1).


The result of the case is that Lotas can no longer gain brand recognition and profits off of the Nike imitations and must stop selling them immediately. As well “ $10K bond has been issued and Warren has 30 days to file in compliance of the court’s ruling”(Sensarma 1). The reason why the court did not rule for everything Nike wanted was because the court did not believe that the damage Lotas committed against Nike was as much as Nike was suing for. This case will probably have to go to court again as right before the case went to court Lotas made two more Nike imitations that were not involved in this case. They have profited again off Nike and Nike will probably have to show them a lesson again.


My opinion on the case is that the court did not strike down hard enough against Lotas. The punishment of essentially do not do this again is not hard enough. Lotas probably made a lot of money and they stole the looks of Nikes shoe even down to the logo on the shoe. They should at the absolute least ne required to pay back the profits they made off the shoe. Many people just bought the shoe from Lotas because it looed the same as Nike except it was cheaper from Lotas. As well clearly, they did not learn their lesson because they released more Nike imitation shoes. As well they should pay the lawyer fees for Nike since Nike was forced to defend their brand against Lotas. Lotas still would have walked away the winner in this situation because their brand was boosted by so many people the Nike imitations that they will likely shop at Lotas again.

Nicholas is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2023.

https://www.yahoo.com/entertainment/nike-suing-warren-lotas-over-164348765.html

Churches, Cuomo and Coronavirus

Posted by Elyse Bentz.

This article published by The New York Times discusses court cases that have made their way to the supreme court about the government lifting their Coronavirus restriction on attendance at religious services. Churches in California, Nevada, and New York all presented cases stating that the restrictions violated the First Amendment right of freedom of religion. The courts have ruled in both the Nevada and California case but not yet the New York case, the two cases presented lost in a ruling of 5-4 in the supreme court. This article was written after the Roman Catholic Diocese of Brooklyn filed an emergency application asking the supreme court to lift restrictions set by Governor Andrew Cuomo.

One view of the court was presented by Chief Justice Roberts where he presents the argument that officials who are elected with protecting the public should not be questions. The article includes a quote that Chief Justice Roberts made on the topic “should not be subject to second-guessing by an unelected federal judiciary, which lacks the background, competence, and expertise to assess public health and is not accountable to the people” (Liptak). Justice Samuel A. Alito Jr. expressed the opposite view saying people’s fundamental rights are being violated: “Whenever fundamental rights are restricted, the Supreme Court and other courts cannot close their eyes,” Justice Alito said on Thursday, rejecting the view that “whenever there is an emergency, executive officials have unlimited, unreviewable discretion’” (Liptak).

The article continues to go into details about the New York case, starting in the appeals court lawyers for Governor Cuomo agreed that the diocese has been following social-distancing and hygiene measures. The diocese does not want anything other than being able to function at 25% capacity and continue to follow Coronavirus regulations. Judge Garaufis said that it was difficult to rule on this case and would leave it up to the governor. This was the ruling “In refusing to block the governor’s order while the diocese’s appeal went forward, a divided three-judge panel of the U.S. Court of Appeals for the Second Circuit drew on Chief Justice Roberts’s concurring opinion in the California case. Since the restrictions on churches were less severe than those on comparable secular gatherings like theaters, casinos and gyms, the majority wrote in an unsigned opinion, they did not run afoul of constitutional protections for religious freedom” (Liptak).

This case will be ruled on in the upcoming weeks and the outcome of New York’s case could be different than the Nevada and California cases because there has been a shift in the courts since Judge Amy Coney Barret has since been elected to the Supreme Court. The article concludes with remarks from Justice Alito talking about how the pandemic has affected our personal liberties “This is especially evident with respect to religious liberty,” he added. “It pains me to say this, but in certain quarters religious liberty is fast becoming a disfavored right’” (Liptak) I think this article brings up a very valid point on how people feel their personal liberties are being taken away as a result of this pandemic. I think the pandemic is taking a toll on everyone in different ways and it’s easy to get frustrated with our elected officials when they take a lot of things away from us but I do believe that it’s for the better (hopefully). I understand why people can get frustrated, especially when it comes to places of worship being shut down or limited capacity. Our religions play a major role in our lives and it’s hard to not go to a place of worship and continue to practice religion. It makes me sad to know that most likely on Christmas my whole family want be able to go to church together but we know that it is the right decision to make to keep us all safe. Hopefully, in the next couple of months with a vaccine almost ready, we can start to get back to a normal lifestyle and we can appreciate the hard decisions our governors have made to try and protect us.

Elyse is a marketing and sports management major at Seton Hall University, Stillman School of Business, Class of 2023.

Article Link: https://www.nytimes.com/2020/11/16/us/supreme-court-coronavirus-cuomo.html

Williams-Sonoma v. Amazon

By Dominick Pellegrini

In 2018, Williams-Sonoma filed a lawsuit against Amazon’s furniture business, Rivet. According to Fox News, Williams-Sonoma claims that Rivet used their designs in order to sell cheaper furniture. The case was handled in U.S. District Court in the Northern District of California, which ruled in a dismissal of the case due to a settlement reached by the parties involved.

According to Retail Dive, during the case Amazon claimed that that Williams-Sonoma misused the term “counterfeit.” If the courts ruled in favor of Amazon, this would cause Amazon to win and Williams-Sonoma would have difficulty bringing up any future cases against the company. Over the past few years, Amazon has faced multiple lawsuits based on knockoff items from competitors.

Many items sold on Amazon are from third-party vendors. There have been many lawsuits against Amazon that they are selling faulty products to customers. Amazon has also faced lawsuits about terrible working conditions by employees. This could raise the question if Amazon is running a moral business model. Amazon is quickly becoming a monopoly and if they take too much power of the market, there could be an expectation that Amazon will face more legal trouble.

Class of 2023

Dominick is a Sport Management major at Seton Hall University, School of Business with a Criminal Justice minor.

https://www.foxbusiness.com/technology/amazon-williams-sonoma-reach-settlement-legal-fight-west-elm-ip

https://www.retaildive.com/news/amazon-and-williams-sonoma-settle-legal-battle-over-ip/588373/

Court upholds hog verdict; Smithfield announces settlement

Posted by Ron Richards

A recent article that was written by Gary D. Robertson states a federal appeals court upheld 2018 jury verdict that awarding money to neighbors of a North Carolina industrial hog that made unbearable to live in peace because of noise and smell. The judges’ ruled that the jurors’ multimillion-dollar verdict in the case against Smithfield, the largest port producer, was unfair.

The decision from the Fourth U.S. Circuit Court of Appeals in Richmond, Virginia stated that they have put an end to this case and a similar nuisance case filed by other North Carolina residents against Smithfield Corp. In a statement Smithfield Chief administrative officer Keira Lombardo stated that, “We have resolved these cases through settlement that will take into account the divided decision of the court.”

The jurors found Smithfield interfered with the life of the residents’ enjoyment of their property. Ten neighbors received a total of $750,000 in compensation, plus $50 million in damages designed to punish Smithfield. The district judge Earl Britt cut punitive damages to 2.5 million. The jurors alleged from all the evidence presented to the court that Smithfield refused to spend money on technology that could improve these problems.

I think Smithfield cooperation should pay whatever the residents asked for because for years they had to put up with the noise and smell from the waste of the hogs. For years, the 400 hundred residents complained to Smithfield of improvement the quality and safety of life for its neighbor, but they never tried to improve technology to help with the environment.

I think the residents deserved to be paid the entire punitive damages awarded to make Smithfield understand that they need to change the way they treat the environment and its neighbors with respect.

https://apnews.com/article/north-carolina-courts-4b2f1db4c21e03653851e81b81996410#:~:text=RALEIGH%2C%20N.C.,said%20made%20living%20nearby%20unbearable.

Ron Richards is a Finance major Senior 2021 at the Stillman School of Business, Seton Hall University.

Bill Bans Imports of Slave-Produced Goods

The President signed into law a bill passed by Congress banning U.S. imports of “fish caught by slaves in Southeast Asia, gold mined by children in Africa, and garments sewn by abused women in Bangladesh.” The law closes a loophole in an 85-year-old tariff law which allowed these products to be sold.

Due to high demand of certain products, the previous law allowed these goods to be sold in the U.S. regardless if they were produced by slave labor. Sen. Sherrod Brown has pressed U.S. Customs to make sure the law is enforced.  He said, “It’s embarrassing that for 85 years, the United States let products made with forced labor into this country, and closing this loophole gives the U.S. an important tool to fight global slavery.”