Writing Legal Opinion Scenario 2

Note: This is homework. Deadline is April 4, 2019 at 2030 Hrs. No late

submission.

FACTS:

New York International Seafoods, Inc. is owned by Clint and Bill, both citizens
of the United States of America. Prior to the entry of New York International
Seafoods, Inc. in the Philippines, Clint and Bill first put up OVL Enterprise in
Nasugbu, Batangas, although registered under the name of, and ostensibly
managed by, Oscar, a Filipino citizen. OVL Enterprise was purposely formed to
conduct research on, as well as to manufacture, tasteless smoke products,
employing among others, Harold (then in-charge of research and development,
i.e., conducting experiments on the injection machine used in the production of
tasteless smoke products), Ruther and Sonny. The tasteless smoke products
produced by OVL Enterprise were then sold to New York International
Seafoods, Inc, for export purposes.

Clint and Bill’s business relationship with Oscar, however, turned sour due to
loss of trust and confidence, which then resulted to the closure of OVL
Enterprise. From then on, or beginning sometime in 2003, New York
International Seafoods, Inc. started purchasing tasteless smoke products from
FreshCo.

It was sometime in 2003 when Clint and Bill put up another enterprise, still in
Nasugbu, Batangas, named Fish Enterprise, this time registered under the
name of, and ostensibly managed by, Nicolo, also a citizen of the Philippines
and a nephew of Harold’s wife. While Nicolo was made to appear as the owner
of Fish Enterprise, it was Clint, together with Bill, who exercised actual control
over all operations of Fish Enterprise, including its administration and finance.

Fish Enterprise, which then had a plant inside the compound owned by Harold,
in Nasugbu, Batangas, engaged in the manufacture of injection machines used
in the production of tasteless smoke products, including component and spare
parts thereof, for both local and export markets, which include Indonesia and
Sri Lanka, among others. Consequently, Harold, Ruther and Sonny were all
transferred to Fish Enterprise from the defunct OVL Enterprise. Ruther later on
became the Manager of Production Supervision while Sonny was designated
as Manager of Research and Development.

Clint and Bill exercised effective control over the entire operations of Fish
Enterprise through their employees in New York International Seafoods, Inc.
based in Ortigas Center, Pasig City, namely, Rowena and a certain Rey, as
accountants, Rhea, Ronnie and a certain Veronica, among others, although
there were many instances when Clint and Bill personally visited the workers,
numbering at ten (10) to twenty (20), and supervised the operations of Fish
Enterprise in Nasugbu, Batangas. Among those employed by Fish Enterprise
were Eugenio, Richard and Beneboy, who were once used by New York
International Seafoods, Inc. as its bogus witnesses in its patent infringement
cases.

All major decisions in Fish Enterprise, including money disbursements, were

subject to the approval of either Clint or Bill. The administrative and operational
expenses, including the salaries of the employees of Fish Enterprise and
rentals, were all financed by New York International Seafoods, Inc., coursed
through its acting manager, Nicolo, by way of telegraphic transfers.
Communications were made through phones and e-mails.

It was Clint who was actively engaged in the marketing and promotion of the
injection machines and their spare parts produced by Fish Enterprise; however,
all sale transactions were entered into not by Fish Enterprise but directly by
New York International Seafoods, Inc. In fact, FreshCo was able to purchase
one (1) set thereof from New York International Seafoods, Inc., which was also
used as “demo” machine. One (1) set, inclusive of other component parts like
needles, was also sold to Sta. Fe Seafoods, Inc. Fish Enterprise was able to
produce and dispose twenty (20) to thirty (30) sets of engine machines valued
at US$50,000.00 to US$60,000.00 each, since it started its operations.

You are now tasked to determine if the above transactions could amount to a
violation of any law. If so, what liability (criminal, civil or administrative) have the
persons involved incurred under the circumstances? Address your Legal
Memo/Opinion to the your professor.