R&: Agency, Bkruptcy, Secs Law, CPA Liab Flashcards
Agency power created by
actual auth (exp or imp)
app auth
ratification
Ratification reqs
cant if princ undiscl
can’t if 3rd pty w/draws
must ratif entire trans
3pty must believe agent acted on his behalf
contractual liab on the principal
depends on whether agent had AUTH (actual or app) or ratified. if so then LIABLE
Contractual liab on the agent
depends whether disclosed princ
discl princ& have auth- not liable
undiscl princ & have auth - liable
– if no auth also liable
contractual liab on 3rd pty
only princ can hold liable
will not be liable if -> princ fraudulently concealed OR increase burden on 3rd pty if perform
TORT Liab on principal
liable if employee and tort within scope of employment
Chp7 income calculation
Avg6mths X 12 compared to median
if below media- chp7 OK
if above then MEANS TEST
Chp 7 means test
(avg monthly - allowed exps) X 60
if chp7 OK
if bet 7025 &11225 -> ok if below 25%of unsec claims
if >11225 NO chp7. Chp13 or dismissed
who can’t do Chp 7
companies are not discharged they are DISSOLVED
RIBS not allowed - railroad, ins COMPS, banks, small invmt comps
chp 13
trustee appted
pay debts in 3-5 yr period
who can’t do chp 11?
NO BIBS
railroads ok. BROKERS NOT ok.
CHp 11 classes
credit counseling reqd if person
no more than 180 days before OR no more than 20d after
CH7& 11 can be involuntary
when NOT paying when due
NOT for farmers or CHAR orgs
involuntary creditor reqs
at least 14,425 in creditors
12 then 3 or more creds in that amount
(unsec debts)
included in bkruptcy estate
prop @file date and income from it
stuff acqd trhu divorce/inher/ins w/in 180 days
trustee can disaffirm PREFERENTIAL pmts if
- 90d before file
- 1 yr before file (insider)
- on antecedent debt
- while insolvent
pmts that CANT be set aside
- ord course of bus (value exch)
- PMSI in equp w/in 30 days
- consumer pmts <600
- support oblig
Objections to Discharge
- NOT indiv
- fraud transfers/prop concealed
- NOT kept books
- 8yr rule
- bktrupcy crime
- NO expl for loss of assets
- NOT asnwer Qs
- improper conduct
- waiver to discharge
- NOt complete course
Exceptions to Discharge- WAFTED
W-willful injury A- alimony F- fines &penalties T- taxes of last 3 yrs E- Educ loans D- Debts not listed by debtor in time
Reaffirmation of Dischgd- (debtor doesnt want them discharged)
- agmt to NOT discharge is before the actual dsch
- provision stated that he can rescind before dischg or 60d after w/ notice
- debtor told it’s NOT reqd by law & told of effect
Revocation of Discharge ( trustee/creditor canceled the disch)
- fraudulent discharge
- prop not discl
- failed to obey or answer Q’s
- no good expl for no docs or mat misst
Distribution of assets on Bkruptcy
secured creditors - up to the sec asset amt
priority claims
general creditors - pro rata share
Priority Claims Order
SAG WEG CTD Support Alimony Gap liabs Wages - 11225 limit -180d Empy Bens- 11225 reduced by wages Grain farm- 5,775limit Consumer deposit -2,500 max Tax claim DWI
CHp11 when can the creditor file the plan?
- debtor hasnt filed w/in 120 d
- trustee appted
- debtr plan NOT accepted w/in 180d
Acceptance of plan conditions
unsec claims- 2/3 $claims & 1/2amt of claims
impaired ints - 2/3 $$ interests
court can confirm plan even if not accepted by all classes if:
accepted at least by one class not unfairly discriminatory
security definition on sec law
- when you rely on mgmt of others to make money
CD and gen ptship ints NOT included
1933 Sec Law
registration reqs
applies to all underwrites, issuers, dealers
1933 Sec Law
Registration Statement
2 parts - Prospectus - offer to sell ------------AudBS& IS facts dislosed: dirs, officers, >10% ----stock/debt outstanding -----purposes for proceeds -----anything that affects secs
shelf registrations
1933- for future issues - ok if usually file under ‘34 at least one year
Timetable of Reg stmt
Prefiling - 30d before Reg- no sales
waiting -after reg before eff- some activity ok
posteff- after eff date - 20d after reg
allowed sales activity durig waiting period
- oral offers ok
- tombstone ad- ids sec, price, & who execs order
- prelim (herring) prospectus- not yet final
- summ prospectus- ok
seasoned filers
filing under ‘34 at least one yr
not fail to pay divs and not default on debt
allowed to
— release factual info during wating period but cant contain anything on regst offering
WKSI
700M in equity outstanding in the hands of ppl not affiliated with issuer
- can make oral/writ offers at ANY time
- special regstn eff imm
- can file FREEWRITING prospectus
- — can contain anything that doesnt conflict
- — muts be filed w/ SEC and kept 3 yrs
- —says where the prelim prospectus can be obtained
1933 registrations exemptions
BRINGS secs exemptions
BRINGS Banks, savings, loans Reg comm carriers (railroads) Ins POLS (comps are NOT exempt) Non profit Gov (not for propietary purposes) ST comm paper (<9mths)
1933 registrations exemptions
transaction exemptions
casual sale - not by dealers, undrW, issuers
exisiting sholders &NO commission
intrastate - only ppl in that state and must do 80%bus there
REG A(partial exemption) - offering stmt filed
REG D (500’s) private issuances
1933 REG D 504
1M limit
no limit on purchasers
no special discl
1933 REG D 505
5M limit
no limit on accredited
no more than 35 unaccred
if any unaccred then provide to EVERYONE audFS
1933 REG D 506
no $limit
no more than 35 unaccred/sophis
if any of those give ALL audFS
1933 Liability
S11- Civil Liab on Reg stmt
S12- civil anti fraud- no reg stmt, no prosp to all, or mat false info on stmtt. NO scienter. imm purchaser can sue
S17 CRIMINAL anti fraud- any fraud with issue
S11 1933
prove ALM
acqd sec,Loss suffered, mat misst
w/in 1 yr of discovery & 3 yrs of offering
1934 Sec law
concerend with exch of secs
regst&rep provision - to some
anti fraud- to ALL
1934 MUST register
national exch
200 sholders
10M assets
exempt -> banks, invtm comps, char orgs
1934 must REPORT
regstd under 34 & 33
1934 what must be reported
10k. 10q, 8k, tender offers made, >5%owners, insider trans, proxy stmts
1934 liability
S18- intentional false stmts - best defense NO scienter
10b-5- applies to ALL- fraud w/ purch/sale sec
1934 10b5 what must be proven
b/s, L, M, S, R, I bough or sold loss mat misrep scienter reliance interstate commerce (phone, nat exch)
CPA legal liab - breach
only liab to client and named 3rd pty benef
cntc defenses apply
CPA legal liab - NEG
must prove:
duty of care, duty breached, injury, damages
liab to ppl CPA KNOWS will rely
ultamares- more narrow- intended 3rd pty
defense: due diligence or damanges not caused by neg
CPA legal liab - actual fraud
5 elems: mirsep of fact actual reliance intent to make rely damages scienter
liab to anyone who can prove these
CPA legal liab - cons fraud (gross neg)
same as fraud elements but NO scienter
OK to SHOW Wps if
subpoena pospective buyer state cpa society quality review defend lawsuit AICPA/state trial board investig GAAp/GASS disc
