Steven and Jan Limbert leased a warehouse to a manufacturing business owned by M

Question

Steven and Jan Limbert leased a warehouse to a manufacturing business owned by Manzar Zuberi. Zuberi signed that lease as the purported President of “Xan Manufacturig, Inc.” which was a nonexistent corporation. Zuberi was actually the president and as shareholder owned 90% of the shares (his father owned the remaining 10%) of two existing corporations, ATM Enterprises, Inc. and Ameri-Pak International, Inc. Under the Ameri-Pak name, Zuberi manufactured a household cleaning product in the Limberts’ warehouse. ATM Enterprises, Inc. had significant assets but operated out of office space at the front of the warehouse, independent of Ameri-Pak but under Zuberi’s close scrutiny, as a wholesaler of the Ameri-Pak cleaning product to retailers throughout the state. The hydrochloric acid used in the manufacturing operations severely damaged the premises, and the Limberts filed a suit against Ameri-Pak International, Inc., ATM Enterprises, Inc., and Zuberi personally to collect for the damage. Who is liable and why? If the Limbert's win, what assets are available? Explain.

Explanation / Answer

Zuberi is entitled to face the consequences, as Zuberi’s both the office has been given to him under a lease by Steven and Jan Limbert with some conditions. It is his responsibility to keep his work under a good maintenance status so that it should be damaged the owner's place. It is purely Zuberi’s fault that he could not attend the conditions of not damaging the property of the owner.

If Limbert’s win, Zuberi will be bounded to pay the entire cost of the damage that has been done as the agreement made not to damage any property of the warehouse for doing the business. Zuberi can be convicted by some charges and the assets which have damaged by his company for the owner may be retrieved including all cost from him.         

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