Courtaney and Biscoe were shareholders in Russ Casino, Inc., which operated a casino in East Texas. Courtaney owned 51 percent of the stock and Biscoe owned 49 percent. Biscoe managed the casino, which Courtaney typically visited once a week. At the end of 2013, an accounting audit showed that the cash on hand was less than the amount posted in the casino’s books. Later, more shortfalls were discovered. In December 2014, Courtaney, and her team of accountants, did a complete audit. Biscoe was unable to account for $1,650,230 in missing cash. Courtaney kept all of the casino’s most recent profits, including Biscoe’s $980,909 share. And, without telling Biscoe, Courtaney sold Russ Casino for $5,400,000 and kept all of the proceeds. Discuss.
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