Exam 36: Fundamental Changes of Corporations

If a purchaser of all a corporation's assets continues the seller's product line, some courts impose upon the purchaser strict tort liability for defects in products previously manufactured by the seller corporation.

If Marco Corporation purchases all of the stock of Polo Corporation rather than all of its assets, there is no change in Polo Corporation's legal status.

A shareholder who opposes a fundamental change to the corporation may make a written or oral demand within the prescribed time period in order to be entitled to payment for his shares.

The court in the Cohen v. Mirage Resorts, Inc. case stated:

Which of the following is untrue about fundamental changes of corporations?

A few states and the 1999 amendments to the Revised Act contain provisions authorizing a corporation to merge or convert into another type of business organization, referred to as an eligible entity.  Which of the following is NOT an eligible entity?

Discuss the similarity between a management buyout and a cash-out combination.

The Revised Act permits the board of directors to adopt certain amendments without shareholder action, unless the articles of incorporation provide otherwise. These amendments would include:

A short-form merger:

A dissenting shareholder who complies with all applicable requirements is entitled to an appraisal remedy.

Brown Corporation purchased all of the stock of Gremlin Corporation. The appraisal remedy is not available to a dissenting shareholder of Brown Corporation.

Dissolution that is judicial may be brought about when:

The 2002 amendments to the Revised Act provide for domestication and conversion into other entities without a merger.

Dissolution of a corporation does not terminate its existence, and does not require that it liquidate its assets.

Under the Revised Act, Bentry Corporation's transfer of some of its assets to its wholly owned subsidiary is considered a sale in the regular course of business.

A sale of substantially all of the assets of a corporation that is in the ordinary course of business of the corporation will not require shareholder approval.

A compulsory share exchange requires approval from the board of directors of each corporation, but not shareholders of either corporation.

The attorney general of the state of incorporation may bring a court action to dissolve a corporation if the corporation obtained its charter through fraud.

The 1999 amendments to the Revised MBCA did not change the voting rule; fundamental changes still need be approved by a majority of the votes entitled to be cast.

The combination of two or more corporations' total assets, title to which is vested in one of them, known as the surviving corporation, is a: