Mel Fastman starts up an appliance business as a corporation, Nobody Inc, of which he is the sole shareholder. Fastman purchases the inventory, sells it to Nobody, and takes back a chattel mortgage. The business fails
There are a number of creditors of Nobody, all of whom are unsecured. Which of the following is TRUE?
A) The claims of the creditors rank ahead of any claims Fastman has against Nobody.
B) In this situation, the creditors will sue Fastman personally and collect from him.
C) Fastman's chattel mortgage takes priority over the claims of the creditors.
D) Fastman's scheme is fraudulent, or akin to fraud, and the corporate veil will be pierced.
E) Both A and D
C
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