Deck 36: Corporate Acquisitions, takeovers, Termination

Question 1

The officers and other employees of each corporation involved must approve a merger.

Answer 1

False

Question 2

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

Answer 2

False

Question 3

After a merger,a disappearing corporation's preexisting rights disappear.

Answer 3

False

Question 4

The board of directors of each corporation involved must approve a share exchange.

Question 5

After a merger,the disappearing corporation retains all of its preexisting obligations.

Question 6

Shareholder appraisal rights do not usually extend to short-form mergers.

Question 7

A corporation can extend its operations through a consolidation.

Question 8

Generally,a corporation that purchases the assets of another corporation is not automatically responsible for the liabilities of the selling corporation.

Question 9

A sale of all of a corporation's assets requires the approval of the state.

Question 10

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

Question 11

After a consolidation,the new corporation inherits all of the consolidating corporations' rights.

Question 12

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

Question 13

After a consolidation,there is only one surviving corporation.

Question 14

A merger involves the legal combination of two or more corporations,only one of which continues to exist.

Question 15

The results of a consolidation are different from those of a merger-both companies remain.

Question 16

In a consolidation,the consolidating corporations become subsidiaries of the new corporation.

Question 17

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

Question 18

If one corporation owns all of the shares of another corporation,it is referred to as the target corporation.

Question 19

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

Question 20

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

Question 21

In some circumstances,a shareholder may petition a court to have the corporation dissolved.

Question 22

A tender offer can be conditioned on the receipt of a specified number of outstanding shares by a certain date.

Question 23

Dissolution can be brought about voluntarily by the directors and shareholders of a corporation.

Question 24

A self-tender is a company's offer to acquire stock from its own shareholders.

Question 25

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

Question 26

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 27

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

Question 28

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

Question 29

A target corporation's attempted takeover of an acquiring corporation is referred to as the Pac-Man defense.

Question 30

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

Question 31

Eagle Financial Corporation merges with First Bank Corporation,with Eagle Financial absorbing First Bank.After the merger

A)a different,new corporation is the surviving corporation.
B)Eagle Financial and First Bank are both surviving corporations.
C)Eagle Financial is the surviving corporation.
D)First Bank is the surviving corporation.

Question 32

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

Question 33

When a corporation is dissolved voluntarily,the corporation must notify its creditors of the dissolution.

Question 34

Like other corporations,Beauty Supplies Corporation can extend its operations through

A)a consolidation.
B)a dissolution.
C)a termination.
D)a winding up.

Question 35

When dissolution takes place by voluntary action,the shareholders are responsible for winding up the affairs of the corporation.

Question 36

Penn files a suit against Roadway Sign Company While the suit is pending,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 37

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

Question 38

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

Question 39

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

Question 40

Jen files a suit against Kopper Kettle Company.While the suit is pending,Kopper Kettle merges with Luminous Pans,Inc.,with Luminous absorbing Kopper Kettle.Now,liability in the suit,if any,rests with

A)Jen.
B)Kopper Kettle.
C)Luminous.
D)no one.

Question 41

Ruff Games,Inc.,wishes to acquire a controlling interest in Smart Toy Company by buying its stock.A public offer by Ruff Games to Smart Toy shareholders is

A)a buyout notice.
B)a golden parachute.
C)an acquisition call.
D)a tender offer.

Question 42

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 43

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

A)automatically responsible.
B)not responsible under any circumstances.
C)responsible if Heavy Hydraulics is a competitor of Giant Lift.
D)responsible if the sale is actually a merger or consolidation.

Question 44

Vacation Adventures,Inc.,and Wild River Tour Company plan to merge.Most likely,the articles 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 45

Nadia is a shareholder of Open Air Productions,Inc.Nadia could normally exercise appraisal rights if Open Air participated in

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

Question 46

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

A)Farm2Fork.
B)Harvest Dining Corporation.
C)Harvest Dining Corporation + EZ Brewing Company.
D)EZ Brewing Company.

Question 47

Salt Corporation wants to acquire or merge with Pepper Corporation.The board and the shareholders of Pepper are resisting.Salt should

A)file a plan of merger with the secretary of state.
B)file an article of merger with Pepper.
C)make a tender offer to the shareholders of Pepper.
D)make a tender offer to the shareholders of Salt.

Question 48

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

A)apply the business judgment rule to analyze the directors' acts.
B)dismiss the suit as a non-judicial dispute over "fair value."
C)evaluate the terms of the deal on the basis of antitrust law.
D)order that the shareholders be paid a "premium" for their stock.

Question 49

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

A)Pink and Purple's directors.
B)Pink and Purple's officers and employees.
C)Pink's shareholders.
D)Purple's shareholders.

Question 50

Stratified Industries,Inc.,increases its holdings,making tender offers 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 51

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

A)CCC.
B)Agri Sweeteners.
C)Bio Farms.
D)no one.

Question 52

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

A)in all circumstances.
B)in no circumstances.
C)only if Kaffeen will be paid with unauthorized,unissued stock.
D)only if Java assumes Kaffeen's liabilities as part of the deal.

Question 53

Firelite Corporation wants to purchase all of the assets of Glo Power Products,Inc.Hadji is an Firelite shareholder.The approval of Hadji and other Firelite 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 54

Ewa is a shareholder of Farm Fresh Foods,Inc.,whose management is considering 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 55

Mall Stores Corporation owns 95 percent of the shares of Niche Retail Corporation.Mall Stores combines with Niche Retail,but only Mall Stores continues to exist.This transaction was

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

Question 56

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

A)the county recording office.
B)the local realtors' association.
C)the state's secretary of state.
D)the federal Bureau of Land Management.

Question 57

Like other corporations,Biopesticide Corporation can extend its operations through

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

Question 58

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 59

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

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

Question 60

Realty Credit Company and Second Mortgage Corporation plan to consolidate.Most likely,the articles of consolidation will be filed with

A)the county recording office.
B)the Securities and Exchange Commission.
C)the state's secretary of state.
D)the U.S.Department of Justice.

Question 61

Marbled Meats Corporation (MMC)proposes to combine with Natural Farms,Inc.,and asks MMC shareholders to vote on the proposal.Omar,an MMC shareholder,votes against it,but is outvoted by the other shareholders.Is there an action that Omar can take to avoid being forced to go along with the transaction If so,what can he do After the combination,Natural Farms ceases to exist.MMC is the surviving firm.What type of combination is this

Question 62

Standard 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 63

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 64

Florence and Grady pool their money and talents to form Happy Home Builders,Inc.They are the firm's only shareholders,directors,and officers.After five years of declining home prices,they decide to cease business.Can they simply dissolve their corporation at will If so,what are the steps in the process