Term
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Definition
1. Instrumentality of I-statet commerce
2. Fraudulent commerce
-failure to disclose when duty/ misrepresentation
-material
-scienter
-reliance
3. Connection with purchase/sale of security |
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Term
| Damages for 10b5 violation |
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Definition
| Avg price 90 days after statemetn - purchase price |
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Term
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Definition
| same elements, except need intent to induce reliance/misrep |
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Term
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Definition
De jure
De facto
Estoppel by corp |
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Term
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Definition
art of incorp filed: APAIN
Authorized shares
Purpose
Agent
Incorporators
Name |
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Term
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Definition
Alter ego of SH
Undercapitalization
Fraud |
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Term
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Definition
Relevant statute exists
Good faith attempt to meet formalities
Did not know lack of corporate status |
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Term
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Definition
If treated business as C, party may be estopped from denying C status. Must deal directly. for Contracts only
(for parties or C itself) |
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Term
| Redemption and Reacquisition |
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Definition
i. Redemption: articles may provide that certain classes of shares may be reacquired by the corp at the discretion fo the bod
ii. Reacquisition of shares: corp may repurchase shares from sh's who voluntarily offer to sell their shares to the corp |
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Term
| what must you do if insider trading ? |
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Definition
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Term
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Definition
Tippers-fid duty, material info, knowingly (or should have), improper purpose (incl personal benefit)
Tippee- traded, and knew/should have known improper info |
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Term
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Definition
| if no fid. duty - trading on non public info. only some courts recognize it. |
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Term
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Definition
Officer, director, 10% sh purchasing/selling w/n 6 month period
C is nationally traded, or 500sh w/10mil assets
Damages: highest sales - lowest purchases
No good faith defense. just can't. |
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Term
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Definition
| officer, board action. not indiv. BoD member |
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Term
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Definition
req: written, signed
revocable, unless stated irrevocable+interest
term of voting expires in 11 months |
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Term
| effective SH action requirements |
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Definition
Quorum: maj of sh participate
votes: maj of shares for (vs against) |
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Term
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Definition
aka voting trust.
be on file for 10 years
stock transfer restrictions: must be reasonable |
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Term
| What can Sh agreements used for? |
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Definition
Transfer restrictions, right of first refusal, preemption rights, etc.
SH can become the BoD by agreement (same Fid duties)
SH right to remove for/without cause BoD cannot be contracted away |
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Term
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Definition
Sh may proceed by direct action for a breach of duty to sh who faces immediate and direct damage
Breach of duty needs to be shown |
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Term
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Definition
for rights of the corporation
Reqs:
Ownership of stock (beginning, during, end of lawsuit, and at wrongdoing)
Prior demand to BoD unless futile
Demand made to SH (would SH ratified it) |
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Term
| Futility requirement for Derivative suits |
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Definition
| Good faith? BoD can use BJ rule |
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Term
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Definition
can't prejudice minority SH's
-premium sale
-sale to looter |
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Term
| SH action for dissolution |
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Definition
Can ask court to dissolve C
-Irreparable injury threatened, BoD deadlocked
-Opression / Waste occuring
-BoD commiting fraud, illegal act |
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Term
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Definition
Quorum: Need 1/2 of BoD present
Maj wins
No proxy, no agreement alowed |
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Term
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Definition
Duty of Care
-good faith, due care, best interest of corp
-can rely on reports. dont have to investigate further
Loyalty
-No unfair dealing unless disclosed; invalidates K otherwise
-can't become pers interested in trx
exception: if fair. Some jx: disclosed and approved by sh, dir
-Corporate opportunity doctrine
-Can't compete with corp
-no prior arrangement on how they will decide on matters
-duty to compensate themselves and officers properly |
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Term
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Definition
| Excercised due care, good faith, rational basis for decision. Independant comm can show this |
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Term
| Corporate opportunity doctrine |
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Definition
can't usurp corp. opportunity
test:
-same line of biz as corp?
-interest or expectancy in biz op
-make offer to corp first, then if refused, can use. |
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Term
| Independant Ratification of contract |
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Definition
Duty of Loyalty problem. K invalid unless:
Sh approves after disclosure
Board approves and D does not vote |
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Term
| Director liability imdemnity |
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Definition
If D sucessful, entitled to reimbursement for expenses from C.
If unsucessful, depends on 3rd party or SH driverative suit - usually for good faith, etc. |
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Term
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Definition
Fundamental changes in corp identity:
Mergers, Sale of Assets (substantially all)
Dissolution
Majority vote of SH |
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Term
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Definition
| If 90% of shares of Target owned by buyer C, then don't need to. |
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Term
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Definition
| Not recognized by CA or DE. Some sale of assets, etc is same as merger and will req appraisal and voting rights |
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Term
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Definition
| Mergers, Stock-for-Asset (in CA) sale of assets (not cash for asset in CA) |
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Term
| Amending article of incorp |
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Definition
| BoD can do so, unless articles state that only SH can approve changes |
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Term
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Definition
Gathering assets, liquidating, then paying off
1. Promissory note holders and creditors
2. SH |
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