FIDUCIARY FOLLY LEADS TO FIASCO: THE CASE OF CONSOLIDATED PIPELINE AND EQUIPMENT CORPORATION (CPEC)

Jim Jameson, former president of Consolidated Pipeline and Equipment Corp (CPEC) has brought an action against his father (Paul) and his father's accountant (Steve). Following his termination, but prior to the sale of CPEC Jim was paid $3.8 million by CPEC for a parcel of land Paul had essentia...

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Bibliographic Details
Published in:Journal of the International Academy for Case Studies 2010-11, Vol.16 (8), p.19
Main Authors: Sullivan, Laura, Stretcher, Robert, Robertson, Joey
Format: Article
Language:English
Subjects:
Accountants
Case studies
Commercial law
Confidential relationships
Criminal liability
Fiduciary responsibility
Fraud
Inheritance taxes
Litigation
Presidents
State court decisions
Tax avoidance
Online Access:Get full text
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Summary:Jim Jameson, former president of Consolidated Pipeline and Equipment Corp (CPEC) has brought an action against his father (Paul) and his father's accountant (Steve). Following his termination, but prior to the sale of CPEC Jim was paid $3.8 million by CPEC for a parcel of land Paul had essentially given to Jim five years earlier. The purpose of the purchase in excess of the actual value was to transfer an "inheritance" of sorts to Jim while avoiding the tax consequences of a gift tax. Following the sale of CPEC Jim now claims the $3.8 million he received for the land did not represent an amount acceptable for an inheritance. Interestingly, if Jim's conclusion is correct, then the amount paid does not exceed the value of the land, and there would be less suspicion of a fraudulent avoidance of taxes by Paul. The main question addressed by the case is whether Steve, the accountant for CPEC, owes a fiduciary duty to Jim in connection with this land sale.
ISSN:1078-4950
1532-5822