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Business Organizations Keyed to Allen
Francis v. United Jersey Bank
Citation:432 A.2d 814 (N.J. 1981).
Mrs. Pritchard, Mr. Pritchard, and their sons were directors of Pritchard & Baird. Mrs. Pritchard was not active in the business and was unfamiliar with all aspects of the business and never read or obtained annual financial statements. Mr. Pritchard died in 1973 and Mrs. Pritchard was bedridden thereon until her death in 1978. During the 1970s, the Pritchards’ sons withdrew substantial funds from the company as “Shareholder Loans.” These “loans” wreaked havoc on the company’s finances eventually forcing it into bankruptcy.
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