Question

A. W. Ham Jr. served on the board of directors for Golden Nugget, Inc., a Nevada corporation. In 1969, while Mr. Ham was a director and legal counsel for Golden Nugget, he obtained a leasehold interest with an option to purchase in the California Club. The California Club is at 101 Fremont Street, Las Vegas, Nevada, and is located next to a series of properties on which Golden Nugget operates its casinos. Mr. Ham leased the property from his former wife. Golden Nugget was looking for property to expand and had, in fact, been expanding onto other lots in the area. Was there a breach of a corporate opportunity

Answer 1

There has been an apparent breach

of business opportunity by A.W.

Ham Jr., legal counsel and a

director of Golden Nugget Inc.

Ham breached his fiduciary duty

towards Golden Nugget with the

acquisition of a leasehold interest

in the California Club with an

option to purchase. Ham

purchased the lease with intent to

lease the property to Golden

Nugget at a substantially higher

rate for future personal gains.

Ham knew that Golden Nugget

was acquiring properties that were

located in the area such as the

California Club. Ham in his

fiduciary capacity not only failed to

fulfill his duties by usurping a

business opportunity, but also

refrained from informing Golden

Nugget of his failure to do so.

Hams conduct amounts to

constructive fraud as he failed in

his duty to make a full disclosure

of facts that materially affected the

interests of the party towards

which he had fiduciary duties.

However, the court held that the

statute of limitations barred

Golden Nugget's claim that it was

the legal owner of the property.

Step-by-step explanation:

Answer 2

Explanation: see attachment below