The board approves a proposed amendment to deny existing preemptive rights to Class A preferred, and to issue stock in a new Class D preferred that would be accorded liquidation preference after all other classes of preferred stock. Preferred Classes B and C would remain the same. Which of the following would be true?

Question

Quizplus · Accepted Answer

The amendment affects the rights of Class A shareholders, so they would need to vote. Since it involves the issuance of a new class (Class D) that affects the liquidation preference, all existing classes (A, B, and C) would likely need to vote together.

The Board Approves a Proposed Amendment to Deny Existing Preemptive