Exam 41: Mergers and Takeovers

Fact Pattern 41-2B (Questions B18-B19 apply) Popular Movies Corporation wants to gain control of Quality Films, Inc. The companies negoti?ate for several months, without coming to terms. Popular Movies decides to pursue a takeover at?tempt. Quality Films decides to resist. -Refer to Fact Pattern 41-2B. Quality Films issues shares that its shareholders can exchange for cash if a takeover is successful, intending to make Popular Movies's takeover attempt too expensive. This is a

Brite Cosmetics Corporation purchases all of the assets of Color-All Lipsticks Corporation. With respect to Brite Cosmetics' liabilities, Color-All Lipsticks is

A merger involves the legal combination of two or more corporations, after which both continue to exist.

Federal law establishes the specific procedures for a share exchange.

Bread & Bagels Corporation wants to purchase all of the assets of Coffee & Tea Inc. Dolly is a Coffee & Tea shareholder. The approval of Dolly and other Coffee & Tea shareholders is necessary

The officers and other employees of each corporation involved must approve a merger or share exchange plan

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

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

Certain federal guidelines significantly constrain and often prohibit mergers that could result from a purchase of assets.

A target corporation is a corporation being acquired through the purchase of a substantial number of the voting shares of its stock.

Ribeye Restaurants Inc. wants to acquire or merge with SteakHouse Corporation. Ribeye should

The shareholder's appraisal right does not extend to share exchanges and sales of substantially all of the corporate assets.

Fact Pattern 41-1B (Questions B5-B7 apply) DIY Fasteners Company decides to consolidate its operations with Evergrip Studs, Inc., to form Fit-Rite Bolts & Screws Inc. -Refer to Fact Pattern 41-1B. The articles of consolidation dif?fer from Shrimp Boat's articles of incor?poration. The articles

When deciding which form of business organization to choose, businesspersons normally consider only one factor.

Fact Pattern 41-1B (Questions B5-B7 apply) DIY Fasteners Company decides to consolidate its operations with Evergrip Studs, Inc., to form Fit-Rite Bolts & Screws Inc. -Refer to Fact Pattern 41-1B. Evergrip owed money to Guaranty Bank and other creditors. After the consolidation, Fit-Rite must pay

Online GPS Corporation owns 95 percent of the shares of Pinpoint App Inc. Through a certain transaction, Online GPS combines with Pinpoint App, but only Online GPS continues to exist. This is

A board of directors' response to a takeover attempt must be rational in relation to the threat posed.

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

Scuba Adventures Inc. and Tours of the Sea Company decide to consolidate. This corporate combination does not require the approval of

Study Aids Inc. offers to buy the stock of Test Prep Products Corporation. Test Prep's directors oppose the offer. Some of the Test Prep shareholders file a suit, alleging a breach of the directors' fiduciary duties. Most likely, the court will