Can ace succeed in a suit against blec for fraud


Question: Ace Incorporated offers to buy Black Jack Entertainment company. On March 1st BJEC gives Ace copies of BJEC's financial statements for the previous year. The statements show a total value of inventory of $10 million. On March 15th BJEC discovers that the inventory value is overstated by nearly $1 million, but does not inform Ace. On May1st, Ace, relying on those statements, buys BJEC. On May 25th Ace discovers the overstatement and begins the legal process for filing a suit against BJEC. Can Ace succeed in a suit against BLEC for fraud? Explain the legal reasoning behind your decision.

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Accounting Basics: Can ace succeed in a suit against blec for fraud
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