Heritage Spirits, Inc. is a Delaware corporation producing s…
Questions
Heritаge Spirits, Inc. is а Delаware cоrpоratiоn producing small-batch whiskey. CEO Dana Lewis is also the founder, controlling shareholder, and board chair. The CFO falsified production numbers and collateral data to secure a $100 million credit facility. Dana personally purchased a Martha’s Vineyard property using company funds and loan proceeds. She justified the purchase as a company expense because she hosted events at the property, but Dana and her family lived in the home year-round. Other directors were unaware until the bank filed suit alleging loan default and misrepresentation. No board or shareholder approval was obtained for the purchase or related-party use of funds. If Dana later discloses the home purchase and the disinterested directors retroactively approve it after obtaining legal counsel, which result is most accurate?