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Credit Reporting Agencies and the FDCPA

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Q1: Joe and Sue Hill were involved in the operation of Joe's Hamburger Joint in Miracle, State of Nowhere, from the day their parents opened it in 1928. By 1979, Joe, Sue and her husband Jim were running it. The business was a corporation with Joe and Sue each owning half of the stock. Joe died in 2001, leaving his stock in equal shares to his sons, Gregg and Mike. Son Gregg never worked there. Mike did occasional maintenance work until his father's death. Despite their lack of participation, the sons were paid more than $900 per week each. In 2000, Sue's son Lawrence, who had graduated with a degree in restaurant management, that he earned while working part-time at the restaurant, took over its management. When his cousins became threatening, he denied them access to the business and its books. Sue refused Gregg and Mike's offer of about $1.4 million for her stock in the restaurant, and they refused her offer of about $800,000 for theirs. They filed a suit against her, claiming, among other things, breach of fiduciary duty. Should the court order the aunt to buy out the nephews or the nephews to buy out the aunt, or neither? Why?

Q2: Equifax A.R.S., a debt-collection agency, sent Donna Russell a notice about one of her debts. The front of the notice stated that "[i]f you do not dispute this claim (see reverse side) and wish to pay it within the next 10 days we will not post this collection to your file." The reverse side set out Russell's rights under the Fair Debt Collection Practices Act (FDCPA), including that she had thirty days to decide whether to contest the claim. Russell filed a suit in a federal district court against Equifax. The court ruled against Russell, who appealed. On what basis might Russell argue that Equifax violated the FDCPA?

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Solution Summary

This solution thoroughly discusses each business law scenario. The party that should or should not be allowed to buy out the other party in the Joe's Hamburger Joint in Miracle, State of Nowhere, is clearly identified. All applicable legal elements are discussed.

In the second scenario, the violations (if any) that have occurred on behalf of Equifax, the debt collection agency, are discussed. Legal references are included.

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Q1 -- Joe and Sue were involved in their parents restaurant business. Sue later married and her husband also became involved in its operation. Joe and Sue each owned half the stock. Joe later died and left his stock to his sons. One son never worked there, and other other son only did occasional work at the location, which ceased upon his father's death. The sons were each paid $900 per week (despite their lack of involvement). Later, Sue's son began running the location. He worked part-time at the restaurant while pursuing a degree in restaurant management. When his cousins created a problem, he locked them out. The aunt refused their offer for her stock and she refused their offer. Notice how their stock is $1.4 million in the offer? For a hamburger restaurant, this price seems unreasonable, which is an issue the court would consider. Should the court order the aunt to buy out the nephews or the opposite to ...

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