Business law and ethics

Question 1

debtor’s bankruptcy estate

Answer 1

property owned by the debtor when the bankruptcy petition is filed. It also includes property owed to the debtor as of the filing as well as income from property owned by the debtor. Additionally, property received by the debtor within 180 days after the petition is filed is part of the estate if it is received by inheritance, bequest, or devise, or from life insurance, a divorce decree, or a property settlement with one’s spouse.

Question 2

A surety’s liability can be reduced

Answer 2

The release or impairment of collateral injures a surety’s interest since a surety would acquire rights against the collateral upon paying the off the debt.

if collateral is released or impaired, then the surety’s obligation is reduced by the value of the collateral or by the amount of the impairment.

Question 3

filing of an involuntary petition in bankruptcy

Answer 3

The filing of an involuntary petition in bankruptcy stops the enforcement of most collections of debts and legal proceedings against the debtor’s estate.

Question 4

An exemption from Registration requirements of Securities Act of 1933

Answer 4

When more than $5,000,000 in securities are being offered, an exemption from the registration requirements of the Securities Act of 1933 is available under Rule 506 of Regulation D. Securities under the Act include debentures and investment contracts.

Question 5

A security interest attaches when:

Answer 5

The debtor has rights in the collateral
the creditor extends value
and a record of the security agreement exists.

Question 6

Securities Exchange Act - Insiders

Answer 6

insiders include officers, directors, and beneficial owners of more than 10% of any class of the issuer’s equity securities.

Question 7

Corporate income tax payment

Answer 7

A corporation generally must pay four installments of estimated tax, each equal to 25% of its required annual payment. A penalty for the underpayment of estimated taxes can be avoided if a corporation’s quarterly estimated payments are at least equal to the least of (1) 100% of the tax shown on the current year’s tax return, (2) 100% of the tax that would be due by placing the current year’s income for specified monthly periods on an annualized basis, or (3) 100% of the tax shown on the corporation’s return for the preceding year. However, the preceding year’s tax liability cannot be used to determine estimated payments if no tax liability existed in the preceding year or a short-period tax return was filed for the preceding year.

Question 8

Securities Exchange Act of 1934 - antifraud provisions proof

Answer 8

A private action under the 1934 Act is similar to a common-law fraud action in that the plaintiff must show that he relied on the misstatement and that the defendant intended to deceive in making the misstatement.

But, unlike a common-law fraud action, there is no requirement of privity, or even that the plaintiff was an intended user of the false statement.