Tests to Memorize for Corporations Flashcards
what is the hollinger analysis
all or substantially all
what is the ALI test
-as a matter of policy it gives other corporations a road map to avoid litigation
-relationships from business
-no disclosure
-same line of business
-did corporation have capacity to take opportunity
what are types of tests for corporate opportunities?
-line of business (Delaware)
-fairness
-combination
-process-based ALI test
what are the three characteristics of a closely held corporation?
and 2 additional characteristics?
small number of shareholders; no ready market for shares; shareholder/mgmt overlap
also: usually source of income for owners/SHs; SH/director power is largely nominal/superficial when all parties are all roles
what are the two parts to the Unocal standard and what do they mean
-reasonably perceived threat
-reasonable response
BJR as long as both conditions are met
what are the terms of Del. 144
-disclosure and director preapproval
–BJR/gross negligence available
—plaintiff holds B/P
-disclosure and shareholder preapproval
–waste standard applies
—plaintiff holds B/P
-disclosure or preapproval absent
–fairness standard applies
—defendant holds B/P
what is the standard of review for the business judgment rule
can only show gross negligence/irrationality if these pre-conditions apply
-make a decision
-make an informed decision
-act in good faith
-act without conflict of interest
Otherwise its BJR (presumption in DEL)!
what are the terms for an exception to the derivative requirement under Barth
-avoid risk of multiple actions
-creditors will not be prejudiced
-achieves fair distribution of the recovery
JUDGE’S DISCRETION
what are the 2 terms of an agency relationship
mutual consent; agent agrees to subject principle control
what are the two exceptions to merger statutory voting
small scale (less than 20%)
-vote for transferor
-no vote for survivor
-appraisal for transferor
-no appraisal for survivor
short-form (90%)
-no vote for transferor
-no vote for survivor
-appraisal for transferor
-no appraisal for survivor
what does fairness mean
fair price; fair dealing; fairness in transaction overall
-fair price means what an arms length transaction would pay
what are the five parts of 10b5
manipulative or deceptive device; interstate commerce; materiality; purchase or sale; causation
what are the terms of making sure something isnt coercive
-majority-minority provision
-no retribution
-tender offer and back end price would be the same
what is the 3 part reasonable doubt test under Zuckerberg
director received a material personal benefit; directors face liability for these claims; sufficient ties that question independence
what are the 4 identifiers for alter egos
lack of formalities; co-mingling of funds; intentional undercapitalization; plaything of parent
