Legal Aspects of Business Decisions
Project description
Goliath, Inc., a United States producer of gem quality sapphires, set up a subsidiary holding company in the Cayman Islands (Junior, Ltd.) to control all of Goliath’s non-United States subsidiaries. Junior then entered into a cartel agreement with producers of sapphires in those countries (other than the US) where sapphires are found. The cartel agreement allocated markets and set prices for all sapphires sold outside of the United States. The United States government has now brought suit against both Goliath and Junior for violating the US Sherman Antitrust Act. Goliath answers that it was not a party to the cartel agreement and that the agreement does not affect the US market for sapphires. Junior answers that it is not subject to the jurisdiction of the US courts.
Are Goliath and Junior correct? Explain!
If they are incorrect, explain why.
What options do they have?

One of the problems that occur when businesses establish subsidiary companies in foreign countries is the issue of who is responsible for which company. The resolution of this issue has serious implications for all of the employees of both companies as well as the communities that both companies serve. Discuss the economic, political, social, and legal implications of this kind of situation.



Legal Aspects of Business Decisions