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Which of the Following Was the Result on Appeal in Royal

Question 24

Multiple Choice

Which of the following was the result on appeal in Royal Crown Companies Inc.,v.McMahon,the case in the text in which the former president of a subsidiary of Royal Crown sued claiming that an agreement regarding severance pay was breached?


A) The court ruled that a golden parachute contract is void as against public policy and, therefore, unenforceable.
B) The court ruled that a severance agreement, regardless of whether it is considered a golden parachute contract, is contrary to the employment at will principle and, therefore, unenforceable.
C) The court ruled that while severance agreements approved by a majority of shareholders are valid, the severance agreement in the case was not so approved and was, therefore, invalid.
D) The court ruled that the agreement would be enforced but only because it was not considered a golden parachute contract.
E) The court ruled that the severance agreement was valid and enforceable and that it made no difference that it was considered a golden parachute agreement.

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