Question 1

A "short-form merger" requires shareholder approval of both corporations.

Accepted Answer

A) True 
 B)False

Question 2

The case of Alpert v. 28 Williams St.Corp. involves a compulsory share exchange.

Accepted Answer

A) True 
 B)False

Question 3

Statutory provisions protect creditors upon the dissolution of a corporation.

Accepted Answer

A) True 
 B)False

Question 4

Appraisal rights:

Accepted Answer

A)  belong to dissenting shareholders. 
B)  can be exercised by a target company any time before acquisition. 
C)  allow a target company to get a fair valuation of their assets before sale. 
D)  always give all shareholders the fair market value of their shares. 
A)  belong to dissenting shareholders. 
B)  can be exercised by a target company any time before acquisition. 
C)  allow a target company to get a fair valuation of their assets before sale. 
D)  always give all shareholders the fair market value of their shares.

Question 5

Any method of combination of corporations that involves shares, proxy solicitations, or tender offers may be subject to federal securities regulation.

Accepted Answer

A) True 
 B)False

Question 6

The concept of a combination that makes a publicly held corporation a private one and includes cash-out contributions and management buyouts is a:

Accepted Answer

A)  going private transaction. 
B)  privitization procedure. 
C)  merger. 
D)  changeover conglomeration. 
A)  going private transaction. 
B)  privitization procedure. 
C)  merger. 
D)  changeover conglomeration.

Question 7

A court may not dissolve a corporation in a proceeding brought by a shareholder if it is only established that the acts of the directors are merely oppressive and not destructive.

Accepted Answer

A) True 
 B)False

Question 8

Larson & Son manufactured welders that frequently malfunctioned, setting clothing on fire and causing serious burns. Larson & Son sold all of its assets to Swenson Co., which continued to manufacture the Larson welder product line. Eleven months after Swenson's purchase, one of Larson's customers sued Swenson for injuries caused by a welder purchased from Larson, six months prior to the purchase by Swenson. Under the circumstances, Swenson Co.:

Accepted Answer

A)  cannot be held liable, because it is a corporation. 
B)  cannot be held liable, because it did not manufacture the welder in question. 
C)  might be held liable in some states under strict liability. 
D)  could not be liable if Larson & Son still exists as a corporate entity. 
A)  cannot be held liable, because it is a corporation. 
B)  cannot be held liable, because it did not manufacture the welder in question. 
C)  might be held liable in some states under strict liability. 
D)  could not be liable if Larson & Son still exists as a corporate entity.

Question 9

The use of cash-out combinations has raised questions concerning both their purpose and their fairness to minority shareholders. In this context, fairness includes:

Accepted Answer

A)  fair dealing. 
B)  fair price. 
C)  both fair dealing and fair price. 
D)  tender. 
A)  fair dealing. 
B)  fair price. 
C)  both fair dealing and fair price. 
D)  tender.

Question 10

Under the 1999 amendments to the Revised Act, charter amendments need be approved by only a plurality of the shares cast at a meeting at which exists a quorum consisting of at least a majority of the votes entitled to be cast on the amendment.

Accepted Answer

A) True 
 B)False

Question 11

The right of dissent would exist in all of the following cases EXCEPT where the corporation:

Accepted Answer

A)  is party to a consolidation. 
B)  is party to a merger. 
C)  will be the one acquired in a compulsory share exchange. 
D)  declines to declare dividends for the third year in a row. 
A)  is party to a consolidation. 
B)  is party to a merger. 
C)  will be the one acquired in a compulsory share exchange. 
D)  declines to declare dividends for the third year in a row.

Question 12

A shareholder of Nico Corporation dissents to the corporation's merger with Jinx Corporation. If the appraisal remedy is granted, the shareholders will be paid the:

Accepted Answer

A)  par value of their shares. 
B)  stated value of their shares. 
C)  fair value of their shares. 
D)  accounting book value of their shares. 
A)  par value of their shares. 
B)  stated value of their shares. 
C)  fair value of their shares. 
D)  accounting book value of their shares.

Question 13

If Elliot, a shareholder who dissents to a corporate action, is entitled to appraisal remedies, they will be the:

Accepted Answer

A)  fair value of his shares as of the day the corporation agrees to purchase the shares. 
B)  fair value of the shares immediately before the action to which he objects is taken. 
C)  average purchase price for the shares during the preceding 30 days. 
D)  par value of the shares as set forth in the articles of incorporation.. 
A)  fair value of his shares as of the day the corporation agrees to purchase the shares. 
B)  fair value of the shares immediately before the action to which he objects is taken. 
C)  average purchase price for the shares during the preceding 30 days. 
D)  par value of the shares as set forth in the articles of incorporation..

Question 14

Shareholder approval of a fundamental change requires a unanimous vote.

Accepted Answer

A) True 
 B)False

Question 15

Liquidation of a corporation:

Accepted Answer

A)  is carried out by a court-appointed receiver in any liquidation. 
B)  is carried out by the board of directors, serving as trustees, in a voluntary liquidation. 
C)  results in paying first stockholders with a liquidation preference, then outside creditors, then expenses of liquidation. 
D)  is set up to protect stockholders and the board of directors, but not creditors. 
A)  is carried out by a court-appointed receiver in any liquidation. 
B)  is carried out by the board of directors, serving as trustees, in a voluntary liquidation. 
C)  results in paying first stockholders with a liquidation preference, then outside creditors, then expenses of liquidation. 
D)  is set up to protect stockholders and the board of directors, but not creditors.

Question 16

If a company owns 90 percent or more of a subsidiary's stock, a merger may be effected with approval of the parent's board of directors alone, without resort to shareholders. This is called a:

Accepted Answer

A)  parent-sub merger. 
B)  board merger. 
C)  short-cut merger. 
D)  short-form merger. 
A)  parent-sub merger. 
B)  board merger. 
C)  short-cut merger. 
D)  short-form merger.

Question 17

a. When may the attorney general of a state seek judicial action to dissolve a corporation? 
b. When may the shareholders of a corporation seek to dissolve it? 
c. When may the creditors of a corporation seek to dissolve it?

Accepted Answer

a. An attorney general may seek to disso

Question 18

The consolidation of AB Corporation and ZX Corporation requires the affirmative majority vote of:

Accepted Answer

A)  the boards of directors and shareholders of both corporations. 
B)  the boards of directors of both corporations, but not the shareholders. 
C)  the shareholders of both corporations, but not the boards of directors. 
D)  the directors and shareholders of one of the corporations, but not both corporations. 
A)  the boards of directors and shareholders of both corporations. 
B)  the boards of directors of both corporations, but not the shareholders. 
C)  the shareholders of both corporations, but not the boards of directors. 
D)  the directors and shareholders of one of the corporations, but not both corporations.

Exam 36: Fundamental Changes of Corporations

A "short-form merger" requires shareholder approval of both corporations.

The case of Alpert v. 28 Williams St.Corp. involves a compulsory share exchange.

Statutory provisions protect creditors upon the dissolution of a corporation.

Appraisal rights:

Any method of combination of corporations that involves shares, proxy solicitations, or tender offers may be subject to federal securities regulation.

The concept of a combination that makes a publicly held corporation a private one and includes cash-out contributions and management buyouts is a:

A court may not dissolve a corporation in a proceeding brought by a shareholder if it is only established that the acts of the directors are merely oppressive and not destructive.

The use of cash-out combinations has raised questions concerning both their purpose and their fairness to minority shareholders. In this context, fairness includes:

Under the 1999 amendments to the Revised Act, charter amendments need be approved by only a plurality of the shares cast at a meeting at which exists a quorum consisting of at least a majority of the votes entitled to be cast on the amendment.

The right of dissent would exist in all of the following cases EXCEPT where the corporation:

A shareholder of Nico Corporation dissents to the corporation's merger with Jinx Corporation. If the appraisal remedy is granted, the shareholders will be paid the:

If Elliot, a shareholder who dissents to a corporate action, is entitled to appraisal remedies, they will be the:

Shareholder approval of a fundamental change requires a unanimous vote.

Liquidation of a corporation:

If a company owns 90 percent or more of a subsidiary's stock, a merger may be effected with approval of the parent's board of directors alone, without resort to shareholders. This is called a:

a. When may the attorney general of a state seek judicial action to dissolve a corporation? b. When may the shareholders of a corporation seek to dissolve it? c. When may the creditors of a corporation seek to dissolve it?

The consolidation of AB Corporation and ZX Corporation requires the affirmative majority vote of:

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