Edie, Alma, and Tim established a restaurant called EATs. Edie, a retired
teacher, invested $20,000 in the venture, and Alma and Tim each invested
$10,000. Edie, Alma, and Tim do not have a formal agreement concerning
the allocation of responsibilities, but they each take turns doing the
cooking. The serving and clean-up tasks are done by staff. One day, while
Edie was doing the cooking, Juan got food poisoning from his meal. Juan
intends to sue EATs, Edie, Alma, and Tim for damages of $100,000. If Juan
is successful, how will the damages be allocated among the parties? If the
restaurant were incorporated under EATs Inc. and Edie owned 50% of the
shares, Alma owned 25%, and Tim owned 25%, how would the damages
be allocated? What do these two situations illustrate about risk