R7: Agency / Bankruptcy Flashcards
Events that terminate actual authority
- Death
- Incapacity of the principal
- Discharge in bankruptcy of the principal
- Failure to acquire necessary license
- Destruction of the subject matter
- Subsequent illegality
Agency power can arise through:
- Grant of actual authority
- Apparent authority/estoppel
- Ratification
Duties of Principal to Agent
- Compensation (unless agreed to free)
- Reimbursement
Chapter 7 okay for individuals if:
Avg monthly income for past 6 months < or = state median
Net monthly income X 60 < 7,025
Net monthly income X 60 < 25% of unused claims
Who may petition a debtor involuntary into BK?
- Debtor owes at least $14,425 in unsecured, undisputed debt.
- Fewer than 12 creditors: at least 1 creditor with at least $14,425 may file
- 12 or more creditors: at least 3 creditors with at least $14,425 in aggregate may file
Which debts are not discharged in Chapter 7/11 BK?
"WAFTED" Willful and malicious injury Alimony Fraud / Fines Taxes Educational loans / Embezzlement Debts
Order in which creditors are paid:
- Secured claimants
- Priority claimants (SAG WEG CTI)
- General creditors who filed their claims on time
Order of priority claimants to be paid (paid after secured claimants and before general creditors)
“SAG WEG CTI”
- support obligations to spouse/children
- administrative expenses of BK proceeding
- gap creditors
- wages up to $11,725 for each employee if earned 180 days prior to filing
- employee BP contributions up to $11,725 for each employee reduced by wages
- grain farmers/fishermen claims up to $5,775
- consumer deposits up to $2,600
- tax claims
- injury claims
Define automatic stay
- automatic injunction that halts actions of creditors to collect debts from a debtor who has declared BK.
- does not apply to: criminal prosecutions, paternity suits or alimony.
Define Chapter 7 bankruptcy
Voluntary or involuntary liquidation of a debtor’s estate. May be I, P, C
Define Chapter 9 bankruptcy
Municipal debt adjustment
Define Chapter 11 bankruptcy
Voluntary or involuntary debt reorganization (no liquidation). May be I, P, C
Define Chapter 13 bankruptcy
Voluntary adjustments of debts of individuals with regular income. Debtor pays all or portion of debt over 3-5 years. Individual only.
List securities exempt from registration requirements under Section 3 of 1933 Act
Securities issued by: "BRINGS" Banks Regulated common carriers (railroads) Insurance policies Not for profits Government Short-term commercial paper
What are the general conditions of Regulation D - private offering exemption (transaction exemption)
No advertising, immediate resale prohibited, and notify SEC within 15 days after first sale.
Define Rule 504 under Regulation D - private offering exemption.
$1M limit, no limits on type or # of purchasers
Define Rule 505 under Regulation D - private offering exemption.
$5M limit,
Sell to accredited - no limit, no disclosure,
Sell to unaccredited - limit to 35, disclose AFS
Define Rule 506 under Regulation D - private offering exemption.
No $ limit,
Sell to accredited - no limit, no disclosure,
Sell to unaccredited - limit to 35, sophisticated, disclose AFS
Section 11 requirements to sue
To sue, must prove "LAM" Loss suffered Acquired the stock Material misstatement/omission Need not prove intent (scienter), negligence, reliance
What does the 1934 Act cover?
- subsequent trading (after IPO)
- reporting provisions
- anti fraud provisions
Which companies must register their securities per 1934 Act?
- traded on national exchange
2. have at least 500 shareholders AND more than $10M in assets
Under the 1933 and 1934 Acts which reports must be filed?
10K - annually 60/90 days within YE
10Q - quarterly 40/45 days within YE
8K - 4 days after major change
In addition to reporting companies, who must report to SEC/Issuer/Exchange under 1934 Act?
"Report 5% TIP" 5% or more owners Tender offers Insiders Proxy solicitations/statements
Rule 10b-5 of 1934 Act requirements to sue
"MAIDS" Misrepresentation of material fact Actual justifiable reliance Induce to rely Damages Scienter
who may not file for Chapter 7 BK?
No "RIBS" railroads insurance co banks savings institutions
who may not file for Chapter 11 reorganizations?
No "BIBS" brokers insurance co banks savings institution
