Mergers, Acquisitions, Termination of Corporate Status

Question 1

Mergers

Answer 1

• two corps, one survives.
• consolidation: brand new corp created
• surviving compresponsible for all of old obligations.

Question 2

Procedure

Answer 2

• board and stockholder for both need approve
• MD require 2/3 stockholder
• file plan of merger and amended charter

Question 3

Short-Form Merger

Answer 3

• merger without stockholder approval
• parent corp owns 90% or more of subsidiary’s stock can merge subsidiary into self
• parent can merger 2 subsidiaries together if it owns 90% or more of the stock of both subsidiaries

Question 4

Dissenter’s Appraisal Rights

Answer 4

• requires corp to buy the dissenting stockholder’s stock for fair value
• applies when the corp seeks to amend charter

Question 5

Procedure

Answer 5

• stockholder vote against the transaction
• file notice of dissent with comp prior/imm after the vote
• short-form merger within 30 days of vote
• comp must offer fair value for the stock. If can’t agre, court will determine.

Question 6

Asset Acquisition

Answer 6

• comp can sell its assets w/o stockholder approval w/in the ordinary course of business
• except substantially all of its assets
• board approval
• shareholder of selling corp approval
• buying corp doesn’t have to follow these procedures

Question 7

Termination of Corporation Status

Answer 7

• voluntary dissolution requires a stockholder vote of 2/3
• involuntary dissolution: creditors may dissolve if corp debt not being paid as they come due
  
  • general stockholders may dissolve if corp is insolvent, oppression, or impasse
  • if years since corp elected directors and corp not moving in director stockholders believe appropriate;
  • stockholder own at least 25% of the stock may dissolve if directors are deadlock in management of corp affairs or stockholders are so divided that directors cannot be elected
  • state.