Question 1

Nina is a dissenting shareholder of Mediterranean Olive Oil Company whose management is consid?ering a tender offer by Healthwise Foods,Inc.Nina and Mediterranean cannot agree on the fair value of the stock.The value will be determined by

Accepted Answer

If Nina and Mediterranean cannot agree on the fair value of the stock, then the value will need to be determined by a court. This is the most objective and unbiased method of determining the fair value of the stock. Both parties can present their arguments and evidence, and the court can make an impartial decision based on the facts presented.

Question 2

Pink Boutique Company and Purple Kiosk Company decide to consolidate.This corporate combination does not require the approval of

Accepted Answer

Officers of a company typically do not have the authority to approve major corporate actions like consolidations; such decisions are usually made by the directors and shareholders.

Question 3

Fact Pattern 41-1B 
Shrimp Boat Company decides to consolidate its operations with Trawlers,Inc. ,to form Coastal Fishers Corporation (CFC).
-Refer to Fact Pattern 41-1B.Trawlers had rights in certain property.Af?ter the consolidation,CFC acquires the rights

Accepted Answer

When companies consolidate to form a new corporation, the new corporation generally acquires all the rights and obligations of the consolidated companies. Therefore, CFC would acquire Trawlers' rights in certain property automatically.

Question 4

Fact Pattern 41-2B 
Mega Corporation wants to gain control of MiniCo,Inc.The companies negoti?ate for several months,without coming to terms.Mega decides to pursue a takeover at?tempt.MiniCo decides to resist.
-Refer to Fact Pattern 41-2B.MiniCo issues shares that its shareholders can exchange for cash if a takeover is successful,intending to make Mega's takeover attempt too expensive.This is a

Accepted Answer

MiniCo's action of issuing shares that its shareholders can exchange for cash if a takeover is successful is known as a poison pill defense. This defense is aimed at diluting the value of the company's shares and making the takeover attempt more expensive for the acquiring company. Crown jewel defense involves the sale of a company's most valuable assets, Pac-Man defense involves the target company making a counter-bid for the acquiring company, and white knight defense involves the target company seeking an alternative friendly acquirer. However, none of these defenses are mentioned in the fact pattern.

Question 5

Giant Lift Corporation purchases all of the assets of Heavy Hydraulics Corporation.With respect to Heavy Hydraulics's liabilities,Giant Lift is

Accepted Answer

Giant Lift is responsible for Heavy Hydraulics's liabilities if the transaction is considered a merger or consolidation, as liabilities typically transfer in such cases.

Question 6

Guaranty Financial Corporation merges with Fraternal Bank Corporation,with Guaranty absorbing Fraternal.After the merger

Accepted Answer

After the merger, Guaranty absorbs Fraternal and becomes the surviving corporation.

Question 7

Like other corporations,Riveters Construction Company can expand its operations through

Accepted Answer

The best choice for Riveters Construction Company to expand its operations is through the purchase of substantially all of the assets of another corporation. This will allow the company to acquire new resources, employees, and technology to grow its operations. Liquidation, dissolution or the appointment of a receiver are options for winding up operations, not for expanding them.

Question 8

Realty Credit Company and Security Mortgage Corporation plan to con?solidate.Most likely,the articles of consolidation will be filed with

Accepted Answer

The articles of consolidation typically need to be filed with the state's secretary of state, as they oversee corporate filings and registrations. It is not necessary to file with a county recording office or local realtors' association, and the federal Bureau of Land Management does not have jurisdiction over corporate consolidations.

Question 9

Fact Pattern 41-1B 
Shrimp Boat Company decides to consolidate its operations with Trawlers,Inc. ,to form Coastal Fishers Corporation (CFC).
-Refer to Fact Pattern 41-1B.The articles of consolidation dif?fer from Shrimp Boat's articles of incor?poration.The articles

Accepted Answer

The articles of consolidation replace the original articles of incorporation for both companies involved in the consolidation, forming a new entity.

Question 10

Fact Pattern 41-2B 
Mega Corporation wants to gain control of MiniCo,Inc.The companies negoti?ate for several months,without coming to terms.Mega decides to pursue a takeover at?tempt.MiniCo decides to resist.
-Refer to Fact Pattern 41-2B.MiniCo solicits a merger with NuNation Corporation,a third party,which makes a better offer to MiniCo's share?holders.NuNation is a

Accepted Answer

NuNation Corporation is a white knight because it is a third party that is being sought out by MiniCo to help defend against Mega Corporation's takeover attempt and has made a better offer to MiniCo's shareholders. A crown jewel is a valuable asset that a company may sell in order to fend off a takeover attempt. Pac-Man and poison pill are defensive tactics used by the target company, but they do not apply in this scenario.

Question 11

Nadia is a shareholder of Open Air Productions,Inc.Nadia could normally ex?er?cise appraisal rights if Open Air participated in

Accepted Answer

Appraisal rights typically apply in situations like mergers or share exchanges where shareholders may dissent and seek a fair value for their shares.

Question 12

Fact Pattern 41-2B 
Mega Corporation wants to gain control of MiniCo,Inc.The companies negoti?ate for several months,without coming to terms.Mega decides to pursue a takeover at?tempt.MiniCo decides to resist.
-Refer to Fact Pattern 41-2B.MiniCo is

Accepted Answer

MiniCo is the target corporation because Mega Corporation is attempting to gain control over it.

Question 13

A merger between Grain Mills Corporation and Farm2Fork Distribution Inc.can be expressed as Grain Mills + Farm2Fork =

Accepted Answer

The answer of A merger between Grain Mills Corporation and...

Question 14

Mall Stores Corporation owns 95 percent of the shares of Niche Shoppes Corporation.Through a certain transaction,Mall Stores combines with Niche Shoppes,but only Mall Stores continues to exist.This is

Accepted Answer

A short-form merger occurs when a parent company owns at least 90% of a subsidiary's shares and decides to merge with the subsidiary, resulting in only the parent company continuing to exist. This is the most fitting scenario based on the given information. A consolidation involves two or more companies merging into a new entity, a share exchange involves the exchange of shares between two companies, and a termination refers to the ending of a company's existence.

Question 15

Office Company and Keen Company wish to combine all assets,stock,and personnel into a new firm to be called OK Corporation.This is

Accepted Answer

A consolidation occurs when two or more companies combine to form a completely new entity, as described in the scenario with Office Company and Keen Company forming OK Corporation.

Question 16

Java Corporation wants to purchase all of the assets of Kaffee Corporation.Loki is a Kaffee shareholder.The approval of Loki and other Kaffee shareholders is necessary

Accepted Answer

Shareholders are owners of the company and have the right to approve any major decisions or transactions involving the company. Selling all assets to another corporation qualifies as a major decision, which means the approval of the shareholders is necessary.

Question 17

Fact Pattern 41-1B 
Shrimp Boat Company decides to consolidate its operations with Trawlers,Inc. ,to form Coastal Fishers Corporation (CFC).
-Refer to Fact Pattern 41-1B.Trawlers owed money to View Harbor Storage and other creditors.After the consolidation,CFC must pay

Accepted Answer

When two companies consolidate, the new company formed is responsible for all the debts of the previous companies. Therefore, Coastal Fishers Corporation (CFC) must pay all of Trawlers' debts, including the debt owed to View Harbor Storage and other creditors.

Question 18

Ruff Games,Inc. ,wishes to ac?quire a controlling interest in Sport Toy Com?pany by buying its stock.A public offer by Ruff Games to Sport Toy share?holders is

Accepted Answer

A tender offer is a public offer made by one company to buy enough shares of another company's stock to acquire a controlling interest. This is the appropriate term for Ruff Games' intention to buy Sport Toy Company's stock. A buyout notice and an acquisition call are not commonly used terms in this context, and a golden parachute refers to a compensation package for executives in the event of a company takeover, not a public offer to buy a controlling interest in another company.

Question 19

Corn Candy Corporation (CCC)has a right of action against Bio Farms,Inc.CCC merges with Agri Sweeteners,Inc. ,with Agri absorbing CCC.After the merger,CCC's right of action against Bio Farms can be exercised by

Accepted Answer

After the merger, CCC ceases to exist as a separate entity and its assets and liabilities are absorbed by Agri Sweeteners. Therefore, Agri Sweeteners can exercise CCC's right of action against Bio Farms.

Question 20

Motor Parts Corporation offers to buy the stock of NASCAR Products Corporation (NPC).NPC's directors oppose the offer.Orin and other NPC shareholders file a suit,alleging a breach of the directors' fiduciary duties.Most likely,the court will

Accepted Answer

The court will most likely apply the business judgment rule to analyze the directors' acts. Under this rule, the court presumes that the directors made their decisions in good faith, with the best interests of the corporation in mind, and with a reasonable amount of care. The burden is on the plaintiffs to prove that the directors breached their fiduciary duties, such as by engaging in conflicts of interest or acting in bad faith. The court will not substitute its judgment for that of the directors unless their actions are shown to be irrational, fraudulent, or illegal.

Quiz 41: A: Corporate Merger,consolidation, Termination

Nina is a dissenting shareholder of Mediterranean Olive Oil Company whose management is consid?ering a tender offer by Healthwise Foods,Inc.Nina and Mediterranean cannot agree on the fair value of the stock.The value will be determined by

Pink Boutique Company and Purple Kiosk Company decide to consolidate.This corporate combination does not require the approval of

Fact Pattern 41-1B Shrimp Boat Company decides to consolidate its operations with Trawlers,Inc. ,to form Coastal Fishers Corporation (CFC) . -Refer to Fact Pattern 41-1B.Trawlers had rights in certain property.Af?ter the consolidation,CFC acquires the rights

Giant Lift Corporation purchases all of the assets of Heavy Hydraulics Corporation.With respect to Heavy Hydraulics's liabilities,Giant Lift is

Guaranty Financial Corporation merges with Fraternal Bank Corporation,with Guaranty absorbing Fraternal.After the merger

Like other corporations,Riveters Construction Company can expand its operations through

Realty Credit Company and Security Mortgage Corporation plan to con?solidate.Most likely,the articles of consolidation will be filed with

Fact Pattern 41-1B Shrimp Boat Company decides to consolidate its operations with Trawlers,Inc. ,to form Coastal Fishers Corporation (CFC) . -Refer to Fact Pattern 41-1B.The articles of consolidation dif?fer from Shrimp Boat's articles of incor?poration.The articles

Nadia is a shareholder of Open Air Productions,Inc.Nadia could normally ex?er?cise appraisal rights if Open Air participated in

Fact Pattern 41-2B Mega Corporation wants to gain control of MiniCo,Inc.The companies negoti?ate for several months,without coming to terms.Mega decides to pursue a takeover at?tempt.MiniCo decides to resist. -Refer to Fact Pattern 41-2B.MiniCo is

A merger between Grain Mills Corporation and Farm2Fork Distribution Inc.can be expressed as Grain Mills + Farm2Fork =

Mall Stores Corporation owns 95 percent of the shares of Niche Shoppes Corporation.Through a certain transaction,Mall Stores combines with Niche Shoppes,but only Mall Stores continues to exist.This is

Office Company and Keen Company wish to combine all assets,stock,and personnel into a new firm to be called OK Corporation.This is

Java Corporation wants to purchase all of the assets of Kaffee Corporation.Loki is a Kaffee shareholder.The approval of Loki and other Kaffee shareholders is necessary

Fact Pattern 41-1B Shrimp Boat Company decides to consolidate its operations with Trawlers,Inc. ,to form Coastal Fishers Corporation (CFC) . -Refer to Fact Pattern 41-1B.Trawlers owed money to View Harbor Storage and other creditors.After the consolidation,CFC must pay

Ruff Games,Inc. ,wishes to ac?quire a controlling interest in Sport Toy Com?pany by buying its stock.A public offer by Ruff Games to Sport Toy share?holders is

Corn Candy Corporation (CCC) has a right of action against Bio Farms,Inc.CCC merges with Agri Sweeteners,Inc. ,with Agri absorbing CCC.After the merger,CCC's right of action against Bio Farms can be exercised by

Motor Parts Corporation offers to buy the stock of NASCAR Products Corporation (NPC) .NPC's directors oppose the offer.Orin and other NPC shareholders file a suit,alleging a breach of the directors' fiduciary duties.Most likely,the court will