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| Phillips was the principal promoter of the Waterloo Corporation, a corporation which was to have been incorporated not later than July 31. Among the many things to be accomplished prior to incorporation were the obtaining of capital, the hiring of key executives and the securing of adequate office space. In this connection, Phillips obtained written subscriptions for $1.4 million of common stock from 17 individuals. He hired himself as the chief executive officer of Waterloo at $200,000 for 5 years and leased three floors of office space from Downtown Office Space, Inc. The contract with Downtown was made in the name of the corporation. Phillips had indicated orally that the corporation would be coming into existence shortly. The corporation did not come into existence through no fault of Phillips. Which of the following is correct? A. Phillips has the right to recover the fair value of his services rendered to the proposed corporation. B. The subscribers have a recognized right to sue for and recover damages. C. Phillips is personally liable on the lease with Downtown. D. The subscribers were not bound by their subscriptions until the corporation came into existence. |