Question: during attendance of the capstone course in the university of...
During attendance of the capstone course in The University of the Cumberlands's MBA program, 15 of the MBA students discover that, between them, they have the education, training, experience, entrepeneurial zeal, connections and skill sets that cover a gamut of industries: namely accounting, banking, finance, sales and marketing, distribution and supply chain, human resources and administration, medical professionals, health care administrators, entrepreneurs and leadership coaches, manufacturing and operations, engineering and petroleum executives,and educators.. With entrepreneurial zeal, they decide to form a new company to provide consulting services to business, government, and academia, and each contribute $1,000.00 to begin the new venture. The problem is, they discover they have no lawyer in the group to guide them on the most effective formation (LLC, LLP, Incorporation, etc.) of their new venture. Remembering Professor Gilbert's admonition to be thoughtful in selecting counsel, they assign a committee to retain an attorney to help form up the company and provide initial advice for this new venture. They don't remember which form of company they should select but they agree on the main portion of the name to use: UCMBA's.
Fast-forward 3 years: UCMBA's is vastly successful, gaining some early seed capital by their appearance on a local "Minnow Bowl" show which features locally known "thousandaires" (successful business people who have earned thousands of dollars in their businesses) who invest in start-ups for a hobby. This seed capital helps the company grow exponentially, and in a few short years later the company makes a public securities offering, successfully taking UCMBA's"public". Shortly after becoming a publicly traded company, a division (oil and gas services) of UCMBA's begins secretly bribing foreign officials in order to secure contracts in certain African and Asian companies (violation of FCPA). These bribes are discovered by I. Fleesum, the company's corporate attorney and general counsel for UCMBA's. Additionally, I. Fleesum discovers that UCMBA's accounting division has been falsifiying financial reports that are filed with government agencies (Dodd-Frank/Sarbanes-Oxley) in order to cover up the missing bribe money.
Please discuss the following issues:
1. Discuss UCMBA's committee's task in hiring the initial lawyer for formation and structure issues. What attributes, skills sets, etc. would be desirable in hiring an attorney for this work, how could you ascertain the information, and what kinds of fee structure(s) or billing arrangements would be appropriate or acceptable for these services?;
2. What kind of corporate structure(s) might be acceptable at first? then which corporate structure(s) would be more appropriate or required upon going public?
3. What are some of the legal and ethical responsibilities of attorney I. Fleesum upon learning of the above-referenced frauds while the company is a publicly traded company.
4. Does I. Fleesum need to or is required to resign from UCMBA? Is so, what are some of the things might attorney I. Fleesum do in resigning to avoid drawing attention to the crimes, so as not to violate attorney-client privilege?