blaw chapter 34 – Flashcards
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If a court determines that a manager's corporate decision amounted to self-dealing,
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the business judgment rule will not apply.
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Directors have the authority to manage the corporate business.
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true
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A manager who has engaged in self-dealing has violated the duty of loyalty to the corporation, unless the self-dealing was entirely fair to the corporation.
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true
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On the day a tender offer begins,
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a bidder must file a disclosure statement with the SEC.
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Alex is a director of ABC, Inc. Alex wants to personally make a major purchase from Bravo Co. If it knew of the opportunity, ABC might be also interested in making that same purchase. Alex must
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first offer the opportunity to make the purchase to the disinterested directors of ABC or its shareholders.
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Which of the following describes the duty of loyalty?
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It prohibits managers from making a decision that benefits them at the expense of the corporation.
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A director violates the corporate opportunity doctrine if he or she competes with the corporation, unless the disinterested directors approve of the director's actions.
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true
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Which of the following takeover defenses is evidenced by the target buying back the shark's stock at a premium price?
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greenmail
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In order to use poison pills, staggered boards of directors, and supermajority voting as takeover defenses, they must first be authorized by the shareholders.
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true
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A speculator plans to acquire control of Kelp Corporation and then resell it at a profit. A speculator is sometimes known as a corporate raider.
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true
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Generally, managers that make informed decisions will not be liable even if their decision turned out badly.
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true
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Amy is on the board of directors of Computers Plus. Computers Plus is looking for a warehouse to purchase. Amy owns a warehouse. In order for Amy to sell her warehouse to Computers Plus
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the disinterested members of the board of directors must approve the transaction.
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What is a "scorched earth strategy"?
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A defensive takeover strategy where the target sells off the assets that the takeover company most wants.
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Which of the following statements is correct with respect to state efforts to offer protection to companies targeted for hostile takeovers?
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Both statutory law and the state courts have provided some degree of protection for companies.
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For the business judgment rule to apply, the manager must
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have acted in the best interests of the corporation.
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Which of the following is NOT a method to acquire control of a company?
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make an initial public offering
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Tender offers are regulated on the federal level by the National Labor Relations Act.
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false
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States are not involved in the regulation of corporate takeovers.
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false
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Which of the following is correct concerning anti-takeover efforts?
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Most states have passed laws to deter hostile takeovers, but these statutes have not totally eliminated hostile takeovers.
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The Williams Act
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is designed to regulate the conduct of those attempting to take over a company.
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The "business judgment rule" has been replaced by "good faith statutes" in most states.
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false
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Anti-takeover tactics include all EXCEPT
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negative tender offers
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Which of the following is a fundamental goal of shareholders?
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To have an immediate increase in stock price
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A public offer to buy a block of stock directly from shareholders is called a tender offer.
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true
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The Anderson v. Bellino case held that
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the defendant did not act in good faith and violated the corporate opportunity doctrine.
