Exam 36: Fundamental Changes of Corporations

A purchaser of all the assets of a company normally does not assume the liabilities of that company.

AB Corporation consolidates with ZX Corporation to form A-Z Corporation. The debts of AB Corporation are:

A dissolution may be judicially decreed if a proceeding is brought by the state, a shareholder, or a creditor.

Tico, Inc. and Kanki, Inc. combine all of their assets and create a consolidated corporation, causing the original corporations, Tico and Kanki, to cease to exist.

If Barker Co. buys 51% of the shares of Carter Co.:

a. Action Corporation purchases all of the assets of the Bell Corporation. After the purchase, a creditor of the Bell Corporation asserts that, by buying the assets of the Bell Corporation, Action has automatically assumed all of Bell's obligations. Is he correct? Explain. b. Dicton Corporation is merged into the Crag Corporation. One of Dicton's creditors was not paid before the merger occurred. The creditor demands payment from the board of directors of the Crag Corporation. The board says that because the Dicton Corporation no longer exists, Crag has no obligation to the creditor. Who is right? Explain your answer.

The courts may grant a petition of involuntary dissolution if shareholders:

Which of the following statements about corporate dissolution is INCORRECT?

A court may dissolve a corporation in a proceeding brought by a shareholder when:

A(n) __________ is a general invitation to all of the shareholders of a target company to tender their shares for sale at a specified price.

The Revised Act takes the position that consolidations are, for all practical purposes, obsolete.

A merger of Parker Corporation with Jones Corporation that results in only Parker Corporation's surviving normally would require approval of:

Management buyouts commonly make extensive use of borrowed funds.

The right of dissent results in payment of:

The combination of two or more corporations into a new corporation is known as:

A shareholder who dissents to a merger and is entitled to the appraisal remedy generally does not have the right to attack the validity of the corporate action.

Jasmine owns a controlling interest in the Hardwick Company. Explain her responsibilities if she wants to privately sell her interest.

a. In general, what is considered a fundamental change in a corporation? Give three examples of a fundamental change. b. Who proposes such fundamental changes? Who must approve them? Explain. c. Brian is a minority shareholder in Gryath, Inc. He opposes a fundamental change that is approved and implemented. What rights does he have?

To eliminate minority interests, which of the following are sometimes used to take a publicly held corporation private?

Generally, the secretary of state may commence an administrative proceeding to dissolve a corporation when the corporation: