Business Organizations

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Across
  1. 1. Minority shareholders in close corporations risk being ___ of management and returns with no market
  2. 4. First prong of the tippee liability test requires the first tier tipper to receive a ___
  3. 6. If neither DGCL prong is met, defendant can still show ___
  4. 7. ___ created safe harbor where fiduciaries contemplating a business opportunity present to BOD for consideration
  5. 8. Justice who coined the phrase race to the bottom in Liggett v. Lee
  6. 11. Second prong of DGCL 144 requires majority of disinterested ___
  7. 13. Merger where acquirer forms a shell subsidiary, shareholders of parent company not entitled to vote
  8. 17. First step in Wilkes loyalty breach inquiry
  9. 19. Exception to the limited liability rule of corporations
  10. 20. Two requirements for classic veil piercing: ___ and injustice/fraud
  11. 21. Theory of corporate purpose that the corporation exists because of state
  12. 24. Banned practice of selective disclosure
  13. 25. Partners owe duty of ___ loyalty to partners and partnership
  14. 26. Case that includes the two requirements for classic veil piercing
  15. 27. Theory where person owes duty of trust or confidentiality to a source and used information to purchase or sell securities without disclosure
  16. 29. Courts set aside limited liability protection, holding shareholders or BOD personally liable for corporation's debts or actions
  17. 32. Another name for a tender offer, where it is a direct offer to shareholders to buy shares at a select time and price
  18. 34. DE case for SLCs, two step test where court retains discretion
  19. 35. Pre existing contractual right relating to the opportunity
  20. 37. Assumes BOD acted on an informed basis, in good faith, and in the best interests of the company
  21. 40. Theory of corporate purpose that prioritizes shareholder interest
  22. 42. Acronym for the 4 factor corporate opportunity test
  23. 44. Second inquiry for loyalty breach in close corporations, can that purpose have been achieved through a less harmful ___
  24. 46. Agreements that allow a partner to end their relationship with the other partners and receive a benefit in return for their interest
  25. 47. Fiduciary relationship that results from the manifestation of consent by one person to another that the other shall act on his behalf
  26. 49. BJR fails if BOD didn't ___ themselves of all material information reasonable available
  27. 52. Purported agent has neither actual or apparent authority but principal still liable
  28. 53. One of the characteristics of a public corporation
  29. 56. Duty of ___ triggered whenever a fiduciary's personal interests conflict with the corporations
  30. 61. Firm does not hold a legal right but has an expectancy based on other contractual dealings
  31. 64. Demand requirement/futility case
  32. 65. Merger where controlling shareholders of a corporation buy out the minority shareholders of that corporation to acquire ownership
  33. 67. Case where the two part tippee liability test is derived from
  34. 68. Failure to act in good faith regarding oversight/monitoring
  35. 70. Vote ___ agreements are contract where shareholders agree to vote for each other as directors in close corporations
  36. 72. Duty of ___ encompasses gross negligence on the part of directors
  37. 74. Statutes that permit directors of a corporation to consider the impact of corporate actions on stakeholders like employees, customers, and communities
  38. 79. Case that discusses the aggregate theory
  39. 82. Second prong under Unocal standard of review
  40. 84. Type of voting in close corporations where the total number of votes is the number of shares owned times the number of board vacancies
  41. 86. Need to disclose to client and ___ to preclude liability under misappropriation theory
  42. 87. Merger where plan is drafted and presented to the BOD of each constituent company and then recommended to shareholders for approval
  43. 88. CL case for controlling stockholders; CS owe duty of loyalty to corporation and minority shareholders
  44. 89. First Williams Act requirement is ___ disclosure threshold
  45. 90. 3 types of state anti-takeover legislation are moratorium statutes, stakeholder statutes, and ___ acquisitions
  46. 92. ___ can be made by corporations so long as they are reasonable in amount, serve a benefit to stockholders, and is not a pet charity for personal ends
  47. 94. All partners are ___ of the partnership and can bind it
  48. 95. SEC Rule 14e-3 prohibits insider trading in connection with a ___, not mergers
  49. 96. Acts necessary or incidental to achieving the principal's objective
  50. 97. ___ is material if a reasonable investor would consider the information important in considering whether to buy, sell, or hold a security
  51. 98. A battle for control of a corporation's BOD without buying company outright
  52. 99. This includes timing and structure
Down
  1. 1. Type of voting in close corporations where there is one vote per share per vacancy
  2. 2. ___ duty in certain takeover contexts where there is a change of control of the corporation
  3. 3. Two step inquiry when minority shareholders allege loyalty breach
  4. 5. Shareholder or shareholders of several corporations do not maintain corporate separateness, so all corporations may be treated as a single enterprise for liability
  5. 9. Partners are personally ___ for the debts of the partnership
  6. 10. Disclose or abstain rule of insider trading, requires duty of trust or loyalty for violation
  7. 12. Represents equity ownership in a corporation
  8. 14. Association of two or more persons to carry on as co owners of a business for profit
  9. 15. Demand excused if at least ___ of the BOD received a benefit, faces substantial likelihood of liability, or lacks independence from someone who did either of the first two
  10. 16. Subset of the duty of loyalty
  11. 18. First prong of DGCL 144 requires majority of disinterested ___
  12. 20. Tender offer standard of review when corporation uses defensive action in response to a hostile takeover bid
  13. 21. For the Williams Act, if the offeror raises their price during the tender offer, the higher price must apply to ___ shares already tendered
  14. 22. Control share acquisition in this state
  15. 23. Reimbursed in proxy fights if win or lose
  16. 27. Case that held pooling agreements valid for electing directors but shareholders generally cannot control what directors do once elected
  17. 28. Arises from communications between principal and third party
  18. 30. State that imposes moratorium statutes
  19. 31. Shareholder sues on behalf of corporation
  20. 33. No Revlon duties in ___ mergers
  21. 36. Cannot rely on ___ before motion to dismiss for shareholder suits
  22. 38. Only ___ and proper expenses apply for reimbursement in proxy fights
  23. 39. These enable the BOD to reject shareholder demand or dismiss pending derivative suits
  24. 41. Voting ___ where shareholders transfer stock and voting rights to trustee
  25. 42. This is determined via economic and financial considerations
  26. 43. Governed by the law of the state of incorporation
  27. 45. Case that ruled shareholders are free to dispose of their stock as they see fit and on such terms as a willing buyer offers
  28. 48. Hostile takeovers do not require ___ approval, unlike in mergers
  29. 50. These people/organizations are paid first upon dissolution of partnerships
  30. 51. In a two person partnership, neither partner can constitute a
  31. 54. Case from DE that rejects the MA rule and notes that shareholders in close corporations must protect themselves through advance contractual planning
  32. 55. Final percentage threshold in control share statutes
  33. 57. DGCL 102(b)(7) allows corporations to ___ BOD and officers from monetary damages for gross negligence
  34. 58. 3 basic techniques for acquisition of control, which are proxy fights, tender offers, and ___
  35. 59. For demand, shareholder must make demand on BOD to bring claim or plead demand futility with ___
  36. 60. Threshold question for proxy fight reimbursement, did the contest involve corporate ___
  37. 62. Separate legal entity distinct from its owners
  38. 63. Theory of corporate purpose that the corporation is an independent entity and the BOD can balance interests of stakeholders
  39. 66. Grant of authority by one party to a second party to act as a substitute
  40. 69. First prong required under the Unocal standard of review for tender offers
  41. 71. The ___ Act has 4 elements for tender offers
  42. 73. NY case for SLCs, court defers to SLC if independence, good faith, and reasonable investigation
  43. 74. Rule 14e-3 violation requires ___ steps be taken
  44. 75. State that prioritizes BOD maximizing long term value, but allows consideration of stakeholder interests
  45. 76. Shareholder sues for personal harm, loss not tied to corporation
  46. 77. Amount of "prongs" under DGCL 144(e)(2) defining controlling stockholders
  47. 78. Revlon duties say BOD must obtain best ___ reasonably available once Revlon is triggered
  48. 80. Only reimbursed in proxy fights if they win and the shareholders ratify
  49. 81. Case that includes the 4 factor corporate opportunities test
  50. 83. Management structure of partnerships
  51. 85. If ___ shareholders are party to the agreement and it poses no harm to third parties, courts will enforce vote pooling agreements that control what directors do once elected
  52. 91. The tender offer must remain open for ___ business days under the Williams Act
  53. 93. ___ liability where person received material nonpublic information from a tipper and traded on that information