Question 1

Fact Pattern 36-1 
Grandview Office Suites, Inc., merges with Hilltop Commercial Properties, Inc. Only Hilltop remains.
-Refer to Fact Pattern 36-2. United Resources assumes

Accepted Answer

In a merger, the surviving company assumes all the assets and liabilities of the merging company. Therefore, United Resources assumes all of Shale's and Tierra's debts.

Question 2

Raven is a shareholder of Quantum Mechanix Corporation. Raven could normally ex?er?cise appraisal rights if Quantum participated in

Accepted Answer

The answer of Raven is a shareholder of Quantum Mechanix...

Question 3

Broncobuster BarBQ Company and Cowpuncher Cuisine, Inc. decide to combine. Deanna, a Cowpuncher shareholder, is dissatisfied with the price that she will receive for her stock. In the absence of fraud or other illegal conduct, Deanna's exclusive remedy is to

Accepted Answer

Deanna's exclusive remedy in this scenario is to exercise an appraisal right, which allows minority shareholders to dissent from a merger or acquisition and receive a judicially-determined fair value for their shares. This is the only option available to her under the law in the absence of fraud or other illegal conduct. The other options listed either do not apply or would not be legally permissible.

Question 4

Ben is a shareholder of Cotton Fabric, Inc., whose management is con?sider?ing extending its operations through some type of combination or acquisition with Denim Dungaree Corporation. Ben could normally exercise appraisal rights if Cotton Fabric participates in

Accepted Answer

Appraisal rights typically allow shareholders to demand a fair value for their shares if they do not agree with certain major corporate changes, such as a sale of substantially all of the corporate assets.

Question 5

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

Accepted Answer

Since Eagle Financial is absorbing First Bank, it means that Eagle Financial is the acquiring (or surviving) entity while First Bank will no longer exist as a separate entity. Therefore, the correct answer is C.

Question 6

A merger between Blended Coffee Corporation and Cowland Creamery Inc. can be expressed as Blended Coffee + Cowland Creamery =

Accepted Answer

The answer of A merger between Blended Coffee Corporation and...

Question 7

Fact Pattern 36-1 
Grandview Office Suites, Inc., merges with Hilltop Commercial Properties, Inc. Only Hilltop remains.
-Refer to Fact Pattern 36-2. The formation of United Resources is

Accepted Answer

Grandview Office Suites, Inc., merges with Hilltop Commercial Properties, Inc. Only Hilltop remains. This is a merger, which is a transaction in which one company (Hilltop) acquires all of the assets and liabilities of another company (Grandview) and the acquired company (Grandview) ceases to exist.

Question 8

Mediterranean Herbs Inc. wants to purchase all of the assets of Nature's Spice Company. Olina is a Nature's Spice shareholder. Approval of the deal must be obtained from the shareholders of

Accepted Answer

The answer of Mediterranean Herbs Inc. wants to purchase all...

Question 9

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

Accepted Answer

This transaction is a short-form merger because Mall Stores already owns 95 percent of Niche Retail's shares. As a result, Mall Stores can merge with Niche Retail without going through all of the formal steps of a regular merger, such as a vote by Niche Retail's shareholders.

Question 10

Ground-Up Construction Corporation (CCC) has a right of action against Heavyquip, Inc. Ground-Up Construction merges with Investors Development, Inc., with Investors absorbing Ground-Up. After the merger, Ground-Up's right of action against Heavyquip can be exercised by

Accepted Answer

After the merger, Ground-Up no longer exists as a separate legal entity and therefore cannot exercise its right of action. The right of action is transferred to the surviving entity in the merger, which in this case is Investors. Therefore, Investors can exercise Ground-Up's right of action against Heavyquip.

Question 11

Eye Appliance Company and Fresh Views, Inc., wish to combine all of their assets, stock, and personnel into a new firm to be called Goggles Corporation. This is

Accepted Answer

The answer of Eye Appliance Company and Fresh Views, Inc.,...

Question 12

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

Accepted Answer

When Kopper Kettle merges with Luminous Pans, liability in the pending suit is transferred to Luminous Pans, the surviving company. This is called a "successor liability" and means that Luminous Pans assumes all legal obligations and liabilities of Kopper Kettle. Therefore, liability in the suit now rests with Luminous Pans.

Question 13

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

Accepted Answer

The answer of Precise Device Corporation and Quality Instruments, Inc.,...

Question 14

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

Accepted Answer

The articles of consolidation would need to be filed with the state's secretary of state. This is because the consolidation involves the creation of a new legal entity, which needs to be registered with the state. The county recording office would not be involved as this is not a real estate transaction. The SEC would only be involved if the companies were publicly traded and the consolidation involved securities. The local chamber of commerce is not a government entity and would not have any role in the consolidation process.

Question 15

Algorhythm Stock Trades, Inc., and Big Data Market Analyses, Inc., plan to merge. Most likely, the ar?ticles of merger will be filed with

Accepted Answer

The articles of merger are a legal document that outlines the agreement between Algorhythm Stock Trades, Inc. and Big Data Market Analyses, Inc. to merge. This document is typically filed with the state's secretary of state where the company is incorporated. It is the responsibility of the secretary of state to ensure that the merger is in compliance with state laws and regulations. Filing with the county recording office or local chamber of commerce is not necessary for a merger, and the Securities and Exchange Commission (SEC) only requires filings for public companies or certain transactions.

Question 16

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

Accepted Answer

When one company purchases all the assets of another company, the purchasing company is generally not responsible for the liabilities of the selling company. However, if the purchase is in fact a merger or consolidation, then the purchasing company may become responsible for the liabilities of the selling company.

Question 17

Fact Pattern 36-1 
Grandview Office Suites, Inc., merges with Hilltop Commercial Properties, Inc. Only Hilltop remains.
-Refer to Fact Pattern 36-2. United Resources acquires

Accepted Answer

The fact pattern states that United Resources acquires "all" of Shale's and Tierra's assets, indicating that they acquire the entirety of their assets.

Question 18

Lorelei files a suit against Memphis Recording Company. While the suit is pend?ing, Memphis Recording consolidates with Nashville Music Corporation to form Omni Productions, Inc. Now, liability in the suit, if any, rests with

Accepted Answer

When two companies consolidate to form a new company, the new entity assumes all liabilities of the previous companies. Therefore, liability in the suit now rests with Omni Productions, Inc., and not with Memphis Recording Company or Nashville Music Corporation.

Question 19

Through a certain transaction, Coffee Bean Cafés, Inc., acquires all of the shares of Deli Dining Corporation for some of Coffee Bean's shares. Both Coffee Bean and Deli Dining continue to exist. This is

Accepted Answer

This is a share exchange, as Coffee Bean acquires Deli Dining's shares in exchange for some of its own shares, but both companies continue to exist as separate entities.

Question 20

Fact Pattern 36-1 
Grandview Office Suites, Inc., merges with Hilltop Commercial Properties, Inc. Only Hilltop remains.
-Refer to Fact Pattern 36-1. The articles of merger include changes that differ from Hilltop's articles of incor?poration. The articles of incorporation

Accepted Answer

The articles of incorporation are deemed amended to include the changes specified in the articles of merger.

Quiz 36: Corporate Acquisitions, Takeovers, and Termination

Fact Pattern 36-1 Grandview Office Suites, Inc., merges with Hilltop Commercial Properties, Inc. Only Hilltop remains. -Refer to Fact Pattern 36-2. United Resources assumes