Exam 36: Fundamental Changes of Corporationspart Viii: Debtor and Creditor Relations

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.

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?

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 dissolution may be judicially decreed if a proceeding is brought by the state, a shareholder, or a creditor.

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

A shareholder who dissents to a merger and is entitled to the appraisal remedy generally does not have the right to attack the validity of the corporate action.

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

Jasmine owns a controlling interest in the Hardwick Company.Explain her responsibilities if she wants to privately sell her interest.

Shareholder approval of a fundamental change means a unanimous vote.

Cash-out combinations are used to eliminate minority shareholders by forcing them to accept cash or property for their shares.

A purchaser of all the assets normally does not assume the liabilities of that company.

The secretary of state may bring an action for involuntary dissolution of a company if the corporation has not paid its annual franchise tax.

Liquidation of a corporation:

Generally, the secretary of state may commence an administrative proceeding to dissolve a corporation when the corporation:

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 corporation may accomplish acquiring all or substantially all assets of another corporation by:

A merger of Parker Corporation with Jones Corporation that results in only Parker Corporation's surviving normally would require approval of:

Which of the following statements about corporate dissolution is INCORRECT?

AB Corporation consolidates with ZX Corporation to form A-Z Corporation.The debts of AB Corporation are:

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.: