Deck 41: B: Corporate Merger,consolidation, Termination

Question 1

The power to consolidate is conferred by statute.

Answer 1

True

Question 2

Federal securities laws strictly control the terms,duration,and circum?stances under which most tender offers are made.

Answer 2

True

Question 3

A takeover cannot be challenged on the ground that it would result in a substantial increase in the acquiring corporation's marker power.

Answer 3

False

Question 4

Federal law establishes the specific procedures for mergers.

Question 5

A corporate takeover is the process of acquiring control over a corpora?tion by the purchase of a substantial number of the voting shares of its stock.

Question 6

When a corporation is dissolved voluntarily,the corporation must file articles of dissolution with the state.

Question 7

The board of directors of each corporation involved must approve a merger.

Question 8

Courts do not apply the business judgment rule to analyze whether the directors acted reasonably in resisting a takeover attempt.

Question 9

If a corporation is dissolved,its asset can be liquidated without further notice to a party who has a claim against the firm.

Question 10

In a consolidation,two or more corporations combine so that each corpo?ration continues to exist.

Question 11

Once a dissenting shareholder elects appraisal rights,the shareholder loses his or her shareholder status.

Question 12

Generally,a corporation that purchases the assets of another corpora?tion is automatically responsible for the liabilities of the selling corporation.

Question 13

A corporation that is selling all of its assets must obtain approval only from its board of directors.

Question 14

A short-form merger is the legal combination of two or more corporations online.

Question 15

When a merger takes place,the surviving corporation issues shares or pays fair consideration to the shareholders of the corporation that ceases to exist.

Question 16

Dissolution is the legal death of the artificial "person" of a corporation.

Question 17

How the value of the shares of each merging corporation will be deter?mined is stated after the plan of merger has been approved.

Question 18

On dissolution,corporate assets are distributed to shareholders accord?ing to their stock rights and any remaining assets are used to pay creditors.

Question 19

In a share exchange,some or all of the shares of one corporation are ex?changed for some or all of the shares of another corporation.

Question 20

The state can bring an action to dissolve a corporation that has failed to pay its annual taxes.

Question 21

Fact Pattern 41-3A
Atlantic Corporation's articles of incorporation prohibit a sale of its assets with?out a vote of the board of directors.Atlantic's officers sell some assets to Pacific Company without notice to the board.The officers also fail to pay Atlantic's taxes on time,and some Atlantic funds are not accounted for.
Refer to Fact Pattern 41-3A.The appropriate remedy is most likely

A)a sale of the rest of Atlantic's assets to its directors and shareholders.
B)Atlantic's consolidation or merger with Pacific.
C)Atlantic's dissolution.
D)payment of damages to Atlantic's officers.

Question 22

Firelite Corporation wants to purchase all of the assets of Glo Power Products,Inc.Helen is a Glo Power shareholder.The approval of Helen and other Glo Power shareholders is necessary

A)in all circumstances.
B)in no circumstances.
C)only if Firelite plans to pay with unauthorized,unissued stock.
D)only if the purchase extends Firelite's control over more assets.

Question 23

Fact Pattern 41-1A
Cherry Grove Apartments,Inc. ,merges with Dutch Elm Realty,Inc.Only Dutch Elm remains.
Refer to Fact Pattern 41-2A.The formation of New Energy is

A)a consolidation.
B)a share exchange.
C)a liquidation.
D)a merger.

Question 24

Stratified Industries,Inc. ,increases its holdings,making ten?der of?fers in many states.These offers are subject to

A)federal securities laws only.
B)state antitakeover statutes only.
C)neither state statutes nor federal laws.
D)state antitakeover statutes and federal securities laws.

Question 25

The term for the legal death of the artificial "person" of Skytop Services,Inc. ,or any other corporation,is

A)surviving corporation.
B)dissolution.
C)takeover.
D)winding up.

Question 26

Vacation Adventures,Inc. ,and Wild River Tour Company plan to merge.Most likely,the ar?ticles of merger will be filed with

A)the county recording office.
B)the local chamber of commerce.
C)the state's secretary of state.
D)the national travel agents' association.

Question 27

Precise Device Corporation and Quality Instruments,Inc. ,decide to merge.This corporate combination does not require the approval of

A)Precise and Quality's directors.
B)Precise and Quality's officers.
C)Precise's shareholders.
D)Quality's shareholders.

Question 28

Titan Business Corporation can be compelled to dissolve by

A)its creditors only.
B)itself,through its shareholders and directors,only.
C)itself,through its shareholders and directors,or the state.
D)the state only.

Question 29

Like other corporations,Biopesticide Corporation can extend its opera?tions through

A)a share exchange.
B)a dissolution.
C)a termination.
D)a winding up.

Question 30

Penn files a suit against Roadway Sign Company While the suit is pend?ing,Roadway consolidates with Synchronized Signal Corporation to form Traffic Management,Inc.Now,liability in the suit,if any,rests with

A)Traffic.
B)Roadway and Synchronized.
C)Penn.
D)no one.

Question 31

Fact Pattern 41-1A
Cherry Grove Apartments,Inc. ,merges with Dutch Elm Realty,Inc.Only Dutch Elm remains.
Refer to Fact Pattern 41-2A.New Energy acquires

A)all of Petro's and Oil's assets.
B)half of Petro's and Oil's assets.
C)none of Petro's and Oil's assets.
D)only assets that Petro and Oil acquired after a combina?tion was proposed.

Question 32

Fact Pattern 41-1A
Cherry Grove Apartments,Inc. ,merges with Dutch Elm Realty,Inc.Only Dutch Elm remains.
Refer to Fact Pattern 41-1A.The articles of the merger agreement differ from Dutch Elm's articles of incor?poration.The articles

A)are deemed amended to include the differences.
B)are replaced by the merger agreement.
C)effectively prevent the merger.
D)prevail.

Question 33

Vision Optical Company and Wide Eyes Open,Inc.decide to combine.Xavier,a Wide Eyes shareholder,is dissatisfied with the price that he will receive for his stock.In the absence of fraud or other illegal conduct,Xavier's exclusive remedy is to

A)exercise an appraisal right.
B)file a suit to delay the process.
C)refuse to agree to the deal,which cannot then proceed.
D)urge other shareholders to insist on a higher price.

Question 34

Ridgeway Sand & Gravel Corporation and Quick-Set Paving Company combine so that all that remains after the papers have been signed is Ridgeway.This is

A)a consolidation.
B)a merger.
C)a purchase of assets.
D)a share exchange.

Question 35

Fact Pattern 41-1A
Cherry Grove Apartments,Inc. ,merges with Dutch Elm Realty,Inc.Only Dutch Elm remains.
Refer to Fact Pattern 41-2A.New Energy assumes

A)all of Petro's and Oil's assets.
B)half of Petro's and Oil's assets.
C)none of Petro's and Oil's assets.
D)only debts that Petro and Oil incurred after a combina?tion was proposed.

Question 36

Fact Pattern 41-1A
Cherry Grove Apartments,Inc. ,merges with Dutch Elm Realty,Inc.Only Dutch Elm remains.
Refer to Fact Pattern 41-1A.Cherry Grove owed money to Eager Beaver Repair Service and other creditors.Af?ter the merger,Dutch Elm must pay

A)all of Cherry Grove's debts.
B)half of Cherry Grove's debts.
C)none of Cherry Grove's debts.
D)only debts that Cherry Grove incurred after a merger was proposed.

Question 37

Fact Pattern 41-1A
Cherry Grove Apartments,Inc. ,merges with Dutch Elm Realty,Inc.Only Dutch Elm remains.
Refer to Fact Pattern 41-1A.Cherry Grove held rights in certain real property.After the merger,Dutch Elm acquires the rights

A)automatically.
B)only after completing certain additional statutory procedures.
C)only Cherry Grove's former shareholders expressly approve.
D)only if the acquisition is a specified result of the merger.

Question 38

Ewa is a shareholder of Farm Fresh Foods,Inc. ,whose management is con?sider?ing a tender offer by Growers Market Corporation.Ewa elects appraisal rights.This affects

A)Farm Fresh's consideration of the offer.
B)Ewa's shareholder status.
C)Growers Market's offer.
D)nothing.

Question 39

Through a certain transaction,Corporate Properties,Inc. ,acquires all of the shares of Downtown Realty Corporation for some of Corporate Properties's shares.Both Corporate Properties and Downtown Realty continue to exist.This is

A)a consolidation.
B)a share exchange.
C)a short-form merger.
D)a hold-up.

Question 40

Fact Pattern 41-3A
Atlantic Corporation's articles of incorporation prohibit a sale of its assets with?out a vote of the board of directors.Atlantic's officers sell some assets to Pacific Company without notice to the board.The officers also fail to pay Atlantic's taxes on time,and some Atlantic funds are not accounted for.
Refer to Fact Pattern 41-3A.With respect to Atlantic's share?holders,this conduct is most likely

A)not oppressive because it is undertaken by Atlantic's officers.
B)oppressive because Atlantic's directors may be personally liable.
C)oppressive because Atlantic's shareholders may be personally liable.
D)oppressive because it departs from the standards of fair dealing.

Question 41

Florence and Grady pool their money and talents to form Happy Home Builders,Inc.They are the firm's only shareholders,directors,and offi?cers.After five years of declining home prices,they de?cide to cease busi?ness.Can they simply dis?solve their corporation at will? If so,what are the steps in the process?

Question 42

Spice Corp.wants to acquire all the assets of Sugar Corp.Spice plans to pay for the assets by issuing its own corporate stock.Spice's board of di?rectors has already approved the merger.In what circumstances would the approval of Spice's shareholders be required for this merger? Is the approval of Sugar's shareholders necessary? Explain.