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Items
Details
Author
Title
Corporations : examples & explanations.
Published
New York : Wolters Kluwer Law & Business, [2012]
Copyright
©2012
Call Number
KF1413 .S632 2012
Edition
Seventh edition / Alan R. Palmiter.
ISBN
9781454802471
1454802472
1454802472
Description
xxxiv, 824 pages : illustrations ; 26 cm.
System Control No.
(OCoLC)781848572
Note
Includes index.
Record Appears in
Table of Contents
Preface
xxix
Acknowledgments
xxxi
Special Notice
xxxiii
Part I Introduction To Corporate Law
ch. 1
The Corporation-An Overview
3
[§]1.1.
Corporation Basics
4
[§]1.1.1.
Five Basic Attributes
4
[§]1.1.2.
Theory of the Firm
6
[§]1.2.
Sources of Corporate Law
8
[§]1.2.1.
Historical Sketch of the Corporation
8
[§]1.2.2.
Modern State Business Corporation Statutes
9
[§]1.2.3.
Role of Judge-Made Law
10
[§]1.2.4.
ALI Principles of Corporate Governance
11
[§]1.2.5.
Federal Law
11
[§]1.3.
Corporation as a Constitutional Person
12
[§]1.3.1.
Broad Commercial Rights
13
[§]1.3.2.
Limited Noncommercial Rights
13
ch. 2
Choice of Organizational Form
23
[§]2.1.
Business Organization Choices
24
[§]2.2.
Choosing between Unincorporated and Incorporated Firm
26
[§]2.2.1.
Life Span-Formation and Duration
27
[§]2.2.2.
Financial Rights-Claims on Income Stream and Firm Assets
28
[§]2.2.3.
Firm Governance-Authority to Bind and Control the Firm
29
[§]2.2.4.
Liquidity- Ownership Transferability and Withdrawal
31
[§]2.2.5.
Liability to Outsiders
32
[§]2.3.
Taxation-Critical Element in the Choice
33
[§]2.3.1.
Tax Implications of Organizational Choice
33
[§]2.3.2.
Characterizing the Firm: Corporation or Partnership?
36
[§]2.3.3.
Avoiding Double Taxation
37
Part II. Formation Of The Corporation
ch. 3
Incorporation - How, Where, and What
45
[§]3.1.
Process of Incorporation
45
[§]3.1.1.
Articles of Incorporation
46
[§]3.1.2.
Incorporators
48
[§]3.1.3.
Filing Process
49
[§]3.1.4.
Organizational Meeting
49
[§]3.2.
Choosing Where to Incorporate
50
[§]3.2.1.
Internal Affairs Doctrine
51
[§]3.2.2.
Qualification of Foreign Corporations
51
[§]3.2.3.
Why Delaware for National Businesses?
52
[§]3.3.
Corporate Powers and the Ultra Vires Doctrine
57
[§]3.3.1.
Early Common Law
57
[§]3.3.2.
Erosion of Doctrine
57
[§]3.3.3.
Modern Ultra Vires Doctrine-Limited Planning Device
58
[§]3.3.4.
Distinguishing Ultra Vires from Corporate Duties
59
[§]3.3.5.
Ultra Vires Doctrine and Corporate Largesse
59
ch. 4
Financial Rights in Corporation
65
[§]4.1.
Financial Rights of Equity Shares
66
[§]4.1.1.
Creation of Equity Securities
66
[§]4.1.2.
Basic Equity Ingredients
67
[§]4.1.3.
Common Shares and Preferred Shares
68
[§]4.2.
Equity Financing
76
[§]4.2.1.
Amount of Consideration
76
[§]4.2.2.
Quality of Consideration
77
[§]4.3.
Debt Financing
81
[§]4.3.1.
Debt Securities
82
[§]4.3.2.
Leverage
83
[§]4.3.3.
Tax Advantages of Debt
84
[§]4.3.4.
Debt's Priority over Equity
85
[§]4.4.
Debt-Equity Mix
85
ch. 5
Federal Regulation of Securities Offerings
89
[§]5.1.
Securities Act Disclosure Mandates
90
[§]5.1.1.
Public Offerings-Issuers, Underwriters, Dealers, and Investors
90
[§]5.1.2.
Registration and Mandated Disclosure - [§]5 Prohibitions
91
[§]5.1.3.
State "Blue Sky" Laws
92
[§]5.2.
Exemptions-Tempering the Breadth of [§]5
92
[§]5.2.1.
Intrastate Offerings
93
[§]5.2.2.
Nonpublic (Private) Offerings
94
[§]5.2.3.
Small Offering Exemptions
97
[§]5.2.4.
Exemption for Postdistribution Market Trading
97
[§]5.3.
Civil Liability under Securities Act
104
[§]5.3.1.
Section 12(a) (1) -Rescission for Violations of [§]5
105
[§]5.3.2.
Section 11-Damages for Deceptive Registration Statements
105
[§]5.3.3.
Section 12(a) (2) -Rescission for Misrepresentations
107
[§]5.4.
Definition of Security
110
[§]5.4.1.
Statutory Definition
110
[§]5.4.2.
Definition of Investment Contract
111
Part III. Shareholder Voting Rights
ch. 6
Shareholders' Role in Corporate Governance
117
[§]6.1.
Purposes of Shareholder Voting
118
[§]6.2.
Shareholder Voting in Public Corporations
119
[§]6.2.1.
Proxy Process
119
[§]6.2.2.
History of Public Shareholder Voting
121
[§]6.2.3.
Voting Incentives for Public Shareholders
124
[§]6.3.
Shareholder Voting in Close Corporations
125
ch. 7
Voting Structure
127
[§]7.1.
Shareholders' Governance Role
128
[§]7.1.1.
Election and Removal of Directors
128
[§]7.1.2.
Approval of Board-Initiated Transactions
128
[§]7.1.3.
Shareholder-Initiated Changes
129
[§]7.1.4.
Informational Rights
131
[§]7.1.5.
Enforcement of Shareholder Rights
134
[§]7.2.
Mechanics of Shareholders' Meetings
134
[§]7.2.1.
Annual and Special Meetings
134
[§]7.2.2.
Notice
135
[§]7.2.3.
Quorum
136
[§]7.2.4.
Appearance in Person or by Proxy
136
[§]7.2.5.
Voting at Shareholders' Meetings
137
[§]7.2.6.
Action by Consent
139
[§]7.3.
Election of Directors
139
[§]7.3.1.
Qualifications and Number of Directors
139
[§]7.3.2.
Voting Methods
140
[§]7.3.3.
Removal of Directors
144
ch. 8
Judicial Protection of Voting Rights
153
[§]8.1.
Limits on Insurgent Opportunism
153
[§]8.1.1.
Vote Buying
154
[§]8.1.2.
Payment and Reimbursement of Election Expenses
155
[§]8.2.
Review of Management Actions Affecting Voting Rights
156
[§]8.2.1.
Board's Role in Shareholder Voting
156
[§]8.2.2.
Manipulation of Voting Process
157
[§]8.2.3.
Interference with Voting Opportunities
158
[§]8.2.4.
Deviations from One-Share/One-Vote
160
ch. 9
Federal Regulation of Proxy Voting
169
[§]9.1.
Federal Proxy Regulation-An Overview
170
[§]9.2.
Reach of the SEC Proxy Rules
171
[§]9.2.1.
Public Corporations-Registration under the Exchange Act
171
[§]9.2.2.
Definition of Proxy Solicitation
172
[§]9.2.3.
Mandatory Disclosure When Proxies Not Solicited
174
[§]9.3.
Formal Requirements of SEC Proxy Rules
174
[§]9.3.1.
Mandatory Disclosure in Proxy Statement
174
[§]9.3.2.
Form of Proxy Card
175
[§]9.3.3.
Filing and Distribution of Proxy Statement
176
[§]9.3.4.
Prohibition against Proxy Fraud
176
[§]9.3.5.
Exemptions from Proxy Rules
177
[§]9.4.
Shareholder Initiatives
182
[§]9.4.1.
"Common Carrier" Obligation under Rule 14a-7
182
[§]9.4.2.
Shareholder Proposals under Rule 14a-8
183
[§]9.4.3.
Proxy Access
188
ch. 10
Proxy Fraud
199
[§]10.1.
Private Actions
200
[§]10.1.1.
Traditional State Remedies
200
[§]10.1.2.
Implied Federal Action
200
[§]10.2.
Federal Action for Proxy Fraud
201
[§]10.2.1.
Nature of Action
202
[§]10.2.2.
Elements of Action
202
[§]10.3.
State Action for Proxy Fraud
206
Part IV. Corporate Fiduciary Duties
ch. 11
Corporate Fiduciary Duties An Introduction
215
[§]11.1.
The Corporate Fiduciary-A Unique Relationship
216
[§]11.1.1.
Analogies to Trusts and Partnerships
216
[§]11.1.2.
Theory of Corporate Fiduciary Duties
217
[§]11.1.3.
To Whom Are Fiduciary Duties Owed?
218
[§]11.2.
Fiduciary Duties of Care and Loyalty
221
[§]11.2.1.
Duty of Care
222
[§]11.2.2.
Duty of Loyalty
222
[§]11.2.3.
Judicial Enforcement of Fiduciary Duties
224
[§]11.3.
Fiduciary Duties-Corporate and Market Realities
225
[§]11.3.1.
Fiduciary Duties in Closely Held Corporations
225
[§]11.3.2.
Fiduciary Duties in Modern Public Corporations
225
[§]11.4.
Independent Directors
226
[§]11.5.
Federalization of Corporate Governance
231
[§]11.5.1.
Sarbanes-Oxley Act of 2002
231
[§]11.5.2.
Dodd-Frank Act of 2010
238
ch. 12
Duty of Care and the Business Judgment Rule
243
[§]12.1.
Standards of Care-Aspirational Guidance
243
[§]12.1.1.
Standards of Care
244
[§]12.1.2.
Facets of Duty of Care
244
[§]12.1.3.
Careless Directors Rarely Held Liable
245
[§]12.2.
Business Judgment Rule
245
[§]12.2.1.
Operation of Business Judgment Rule
246
[§]12.2.2.
Justifications for the Business Judgment Presumption
246
[§]12.2.3.
Reliance Corollary
247
[§]12.3.
Overcoming Business Judgment Presumption
248
[§]12.3.1.
Lack of Good Faith
249
[§]12.3.2.
Waste
251
[§]12.3.3.
Gross Negligence
253
[§]12.3.4.
Inattention
256
[§]12.3.5.
Oversight under Sarbanes-Oxley and Dodd-Frank
258
[§]12.4.
Remedies for Breaching the Duty of Care
262
[§]12.4.1.
Personal Liability of Directors
262
[§]12.4.2.
Enjoining Flawed Decision
262
[§]12.5.
Exculpation of Directors' Care Failures
263
[§]12.5.1.
Exculpation Statutes
263
[§]12.5.2.
Effect of Exculpation
263
[§]12.5.3.
Evaluation of Exculpation
264
ch. 13
Duty of Loyalty-Self-Dealing Transactions
277
[§]13.1.
Nature of Self-Dealing
278
[§]13.1.1.
Unfair Diversion of Corporate Assets
278
[§]13.1.2.
Direct and Indirect Self-Interest
278
[§]13.2.
Judicial Suspicion of Self-Dealing Transactions
279
[§]13.2.1.
Early Rule of Voidability
279
[§]13.2.2.
Substantive and Procedural Tests
279
[§]13.2.3.
Burden of Proof
280
[§]13.2.4.
No Business Judgment Presumption
281
[§]13.2.5.
Self-Dealing by Officers and Senior Executives
281
[§]13.2.6.
Aiding and Abetting Liability
282
[§]13.3.
Judicial "Fairness" Tests
282
[§]13.3.1.
Substantive "Fairness"
282
[§]13.3.2.
Procedural "Fairness"-Process of Board Approval
283
[§]13.3.3.
Shareholder Ratification
285
[§]13.4.
Statutory "Safe Harbors"
287
[§]13.4.1.
"Interested Director" Statutes
287
[§]13.4.2.
MBCA Subchapter F
288
[§]13.4.3.
ALI Principles of Corporate Governance
289
[§]13.4.4.
Summary Chart
290
[§]13.5.
Remedies for Self-Dealing
292
[§]13.5.1.
General Remedy-Rescission
292
[§]13.5.2.
Exceptions to Rescission
292
ch. 14
Executive Compensation
301
[§]14.1.
Forms of Executive Compensation
301
[§]14.2.
Judicial Review
304
[§]14.2.1.
Dilemma of Executive Compensation
304
[§]14.2.2.
Compensation Authorized
304
[§]14.2.3.
Disinterested Approval
305
[§]14.2.4.
Waste Standard
306
[§]14.2.5.
Bad Faith Standard
307
[§]14.2.6.
Fair and Reasonable Standard
308
[§]14.3.
Directors' Compensation
309
[§]14.3.1.
Directors' Fees
309
[§]14.3.2.
Compensation for Outside Services
310
[§]14.4.
Regulatory and Market Pressure
310
[§]14.4.1.
Securities and Tax Laws
310
[§]14.4.2.
Sarbanes-Oxley Act
311
[§]14.4.3.
Dodd-Frank Act
312
[§]14.4.4.
Market Pressure
314
ch. 15
Indemnification and Insurance
319
[§]15.1.
Indemnification-Corporate Reimbursement
319
[§]15.1.1.
Mandatory Indemnification for Successful Defense
320
[§]15.1.2.
Permissive (Discretionary) Indemnification for Unsuccessful Defense
322
[§]15.1.3.
Advancement of Litigation Expenses
324
[§]15.1.4.
Exclusivity of Statutory Indemnification
325
[§]15.2.
Insurance
325
[§]15.2.1.
Insurance Covering Corporation's Obligations
325
[§]15.2.2.
Insurance Covering Liability of Directors and Officers
326
ch. 16
Corporate Opportunities and Unfair Competition
335
[§]16.1.
Corporate Opportunity Doctrine
336
[§]16.1.1.
Prohibition against Usurping Corporate Opportunities
336
[§]16.1.2.
Remedies for Usurping a Corporate Opportunity
336
[§]16.2.
Definition of "Corporate Opportunity"
336
[§]16.2.1.
Use of Diverted Corporate Assets
337
[§]16.2.2.
Existing Corporate Interest-Expectancy Test
337
[§]16.2.3.
Corporation's Existing Business - Line-of-Business Test
338
[§]16.2.4.
Eclectic Approaches
339
[§]16.3.
Corporate Rejection and Incapacity
340
[§]16.3.1.
Corporate Rejection
341
[§]16.3.2.
Corporate Incapacity
342
[§]16.3.3.
ALI Principles
342
[§]16.4.
Competition with the Corporation
343
ch. 17
Duties of Controlling Shareholders
351
[§]17.1.
Who Are Controlling Shareholders?
351
[§]17.2.
Parent-Subsidiary Dealings
352
[§]17.2.1.
Dealings with Wholly Owned Subsidiaries
352
[§]17.2.2.
Dealings with Partially Owned Subsidiaries
352
[§]17.2.3.
Judicial Review of Parent-Subsidiary Dealings
353
[§]17.3.
Squeeze-Out Transactions-Eliminating Minority Interests
356
[§]17.3.1.
Squeeze-Out Mechanics
357
[§]17.3.2.
Business Purpose Test
358
[§]17.3.3.
"Entire Fairness" Test
358
[§]17.3.4.
Remedy in Squeezeouts
362
[§]17.3.5.
Fairness in Parent Tender Offer
363
ch. 18
Shareholder Litigation
373
[§]18.1.
Nature of Derivative Litigation
373
[§]18.1.1.
Two Suits in One
374
[§]18.1.2.
All Recovery to Corporation
375
[§]18.1.3.
Reimbursement of Successful Plaintiff's Expenses
375
[§]18.1.4.
Derivative Suit Plaintiff-Self-Appointed Representative
376
[§]18.1.5.
Res Judicata-Preclusion of "Corporate" Relitigation
377
[§]18.1.6.
Time Limitation
377
[§]18.2.
Distinguishing between Derivative, Direct, and Class Action Suits
378
[§]18.2.1.
Examples of Direct Suits
378
[§]18.2.2.
Claims with Direct and Derivative Attributes
379
[§]18.2.3.
Close Corporation Exception
380
[§]18.2.4.
Class Actions -Direct Suits Brought by Representative
381
[§]18.3.
Procedural Restrictions on Derivative Litigation
385
[§]18.3.1.
Distorted Incentives in Derivative Litigation
385
[§]18.3.2.
Litigation Procedural Requirements
386
[§]18.3.3.
Demand Requirement-Exhaustion of Internal Remedies
389
[§]18.3.4.
Court Approval of Settlement-A Clean Solution
390
[§]18.4.
Derivative Litigation in Federal Courts
391
[§]18.4.1.
Diversity Jurisdiction
391
[§]18.4.2.
Federal Actions
392
[§]18.5.
Dismissal of Derivative Litigation-Finding a Corporate Voice
397
[§]18.5.1.
Self-Appointed Derivative Suit Plaintiff
397
[§]18.5.2.
Unwieldy Body of Shareholders
397
[§]18.5.3.
Board of Directors-Voice of Centralized Corporate Governance
398
[§]18.5.4.
Special Litigation Committee
401
Part V. Shareholder Liquidity Rights
ch. 19
Share Transferability-An Introduction
411
[§]19.1.
Share Transfer Rights
412
[§]19.2.
Public Trading of Corporate Securities
413
[§]19.2.1.
Functioning of Public Stock Trading Markets
413
[§]19.2.2.
Efficiency of Public Stock Markets
415
ch. 20
Limitations on Control Sales
419
[§]20.1.
Sale of Office
419
[§]20.2.
Limitations on Sale of Controlling Shares
419
[§]20.2.1.
Control Premium
419
[§]20.2.2.
No-Sharing Rule
420
[§]20.2.3.
Exceptions to No-Sharing Rule
421
[§]20.2.4.
Meaning of Perlman v. Feldmann
423
[§]20.2.5.
Disclosure Duties
425
ch. 21
Disclosure in Securities Trading Markets
431
[§]21.1.
State Disclosure Duties
431
[§]21.2.
Federal Disclosure Requirements
433
[§]21.2.1.
SEC Registration
434
[§]21.2.2.
Periodic Disclosure
434
[§]21.2.3.
Recordkeeping and Foreign Bribes
437
ch. 22
Securities Fraud - Rule 10b-5
439
[§]22.1.
Overview of Rule 10 b-5
439
[§]22.1.1.
History of Rule 10h-5
439
[§]22.1.2.
Private lob-5 Actions and SEC Enforcement
441
[§]22.1.3.
Some 10b-5 Pointers
443
[§]22.2.
Scope of Private 1 Ob-5 Action
445
[§]22.2.1.
Purchasers and Sellers: 1 Ob-5 Standing
445
[§]22.2.2.
Primary Violators: 1 Ob-5 Defendants
447
[§]22.2.3.
Fraud "in Connection with" Securities Transaction
450
[§]22.3.
Fraud Elements of Private 10b-5 Action
452
[§]22.3.1.
Material Deception
453
[§]22.3.2.
Scienter -"Manipulative or Deceptive Device or Contrivance"
456
[§]22.3.3.
Reliance and Causation
457
[§]22.3.4.
Damages
459
[§]22.3.5.
Nature of 10b-5 Liability
462
[§]22.4.
Defenses in Private 10b-5 Action
462
[§]22.4.1.
Limitations and Repose Periods
463
[§]22.4.2.
Contribution and Indemnification
463
[§]22.5.
Comparison to State Law Remedies
464
ch. 23
Insider Trading
473
[§]23.1.
Insider Trading-A Primer
473
[§]23.1.1.
Classic Insider Trading
473
[§]23.1.2.
Misappropriation of Information-Outsider Trading
474
[§]23.1.3.
Theories for Regulating Insider Trading
474
[§]23.1.4.
Policing Insider Trading
476
[§]23.2.
State Law on Insider Trading
476
[§]23.2.1.
Fraud or Deceit-Limited Tort Liability
476
[§]23.2.2.
State Fiduciary Rules
477
[§]23.2.3.
Liability to Corporation
479
[§]23.3.
Application of Rule 10b-5 to Insider Trading
484
[§]23.3.1.
Federal Duty to "Abstain or Disclose"
484
[§]23.3.2.
Insider Trading 10b-5 Primer
488
[§]23.3.3.
Outsider Trading-Misappropriation Theory
490
[§]23.3.4.
Remedies for Insider Trading
495
[§]23.3.5.
Regulation FD and Selective Disclosure
497
[§]23.4.
Regulation of Insider Trading under Sarbanes-Oxley (and Dodd-Frank)
499
[§]23.4.1.
Insider Trading during Pension Plan Trading Blackout
499
[§]23.4.2.
Reimbursement ("Clawback") of Incentive Pay When Financials Misstated
500
ch. 24
Section 16(b) - Disgorgement of Short-Swing Profits
513
[§]24.1.
Coverage of [§]16
513
[§]24.2.
Reports
515
[§]24.3.
Disgorging Short-Swing Profits-Mechanical Test
515
[§]24.3.1.
Special Interpretive Issues
517
[§]24.3.2.
Section 16(b) Litigation
520
Part VI. Closely Held Corporation
ch. 25
Control Dilemma in Close Corporation
531
[§]25.1.
Special Problems in Close Corporation
532
[§]25.2.
Planning in Close Corporation
533
ch. 26
Planning in Close Corporation
537
[§]26.1.
Minority Control Rights
538
[§]26.1.1.
Supermajority Provisions
538
[§]26.1.2.
Vote-Pooling Agreements
539
[§]26.2.
Self-Enforcing Control Structures
545
[§]26.2.1.
Voting Trusts
545
[§]26.2.2.
Classes of Stock (Classified Board)
547
[§]26.2.3.
Irrevocable Proxies
549
[§]26.3.
Transfer Restrictions and Contractual Liquidity Rights
553
[§]26.3.1.
Creating Transfer Restrictions and Liquidity Rights
554
[§]26.3.2.
Validity of Transfer Restrictions
555
[§]26.4.
Restraints on Directors' Discretion
560
[§]26.4.1.
Validity of Management Agreements
561
[§]26.4.2.
Effect of Invalidity and Enforcement
562
[§]26.5.
Close Corporation Statutes
563
ch. 27
Dispute Resolution in Close Corporations
571
[§]27.1.
Close Corporation Disputes
571
[§]27.1.1.
Freezeouts and Forceouts
571
[§]27.1.2.
Squeeze-Out Dilemma
572
[§]27.1.3.
Minority Shareholder's Options
572
[§]27.2.
Judicial Protection of Minority Shareholders
574
[§]27.2.1.
Involuntary Dissolution
575
[§]27.2.2.
Fiduciary Protection
577
[§]27.3.
Deadlocks
582
[§]27.3.1.
Environment for Deadlocks
583
[§]27.3.2.
Judicial Deadlock Remedies
583
[§]27.3.3.
Planning for Deadlocks
584
Part VII. Corporate Creditors
ch. 28
Rule of Limited Liability
591
[§]28.1.
Corporate Limited Liability
592
[§]28.2.
History of Limited Liability
594
ch. 29
Liability during Incorporation Process
599
[§]29.1.
Preincorporation Contracts
599
[§]29.1.1.
Promoter's Contractual Liability
601
[§]29.1.2.
Corporation's Contractual Liability
602
[§]29.1.3.
Third Party's Liability on Contract
603
[§]29.2.
Liability for Defective Incorporation
603
[§]29.2.1.
De Facto Corporation and Corporation by Estoppel
603
[§]29.2.2.
Modern Abolition of the De Facto Corporation and Estoppel Doctrines?
604
[§]29.2.3.
Liability for Nonsignatory Participants
606
[§]29.2.4.
Administrative Dissolution
607
ch. 30
Authority to Bind the Corporation
615
[§]30.1.
Board Decision Making
615
[§]30.1.1.
Board Meetings-Notice and Quorum
616
[§]30.1.2.
Board Action-Majority Vote at a Meeting
617
[§]30.1.3.
Delegating Board Functions to Committees
618
[§]30.2.
Corporate Authority
619
[§]30.2.1.
Actual Authority-Internal Action
619
[§]30.2.2.
Apparent Authority-External Appearances
620
[§]30.2.3.
Inherent Authority
623
[§]30.3.
Respondeat Superior-Corporate Liability for Employee Torts
623
ch. 31
Limitations on Corporate Distributions
631
[§]31.1.
Distributions-Transferring Assets to Shareholders
631
[§]31.1.1.
Dividends and Distributions
632
[§]31.1.2.
Redemption and Repurchase
633
[§]31.2.
Limitations on Distributions
633
[§]31.2.1.
"Equity Insolvency" Test
633
[§]31.2.2.
"Balance Sheet" Tests
634
[§]31.2.3.
Manipulating Balance Sheet to Increase Shareholders' Equity
640
[§]31.2.4.
Timing of Distributions
641
[§]31.3.
Contractual Limitations on Distributions
642
[§]31.4.
Liability of Directors (and Shareholders) for Illegal Distributions
642
ch. 32
Piercing the Corporate Veil
653
[§]32.1.
Traditional Piercing Factors
654
[§]32.1.1.
Closely Held Corporations
655
[§]32.1.2.
Involuntary Creditors
655
[§]32.1.3.
Enterprise Liability Doctrine
656
[§]32.1.4.
Failure to Observe Corporate Formalities
658
[§]32.1.5.
Commingling Assets and Affairs
658
[§]32.1.6.
Undercapitalization and Purposeful Insolvency
659
[§]32.1.7.
Active Corporate Participation
660
[§]32.1.8.
Deception
660
[§]32.1.9.
Distinguishing Direct Personal Liability
661
[§]32.1.10.
Reverse Piercing
661
[§]32.2.
Distilling a Principle-Solving the Piercing Conundrum
668
[§]32.2.1.
Uniform Fraudulent Transfer Act
668
[§]32.2.2.
Applying UFTA to Piercing Conundrum
669
[§]32.2.3.
Limits of UFTA
670
ch. 33
Statutory Recognition of Corporation
675
[§]33.1.
Statutory Recognition of Corporation
676
[§]33.1.1.
Corporation as Separate Entity
676
[§]33.1.2.
Corporate Limited Liability
676
[§]33.2.
Equitable Subordination Doctrine
679
Part VIII. Fundamental Corporate Changes
ch. 34
Takeovers - An Introduction
687
[§]34.1.
Hostile Choices-Proxy Contest or Tender Offer
688
[§]34.2.
Garden-Variety Takeover Drama
689
[§]34.3.
Epilogue-Is the Takeover Phenomenon Healthy?
698
ch. 35
Internal Fundamental Changes
703
[§]35.1.
Charter Amendments
704
[§]35.1.1.
Power to Amend Charter
704
[§]35.1.2.
Mechanics for Approving Charter Amendments
705
[§]35.1.3.
Recapitalizations
706
[§]35.2.
Dissolution
707
[§]35.2.1.
Dissolution Terminology
707
[§]35.2.2.
Process o f Approval
707
[§]35.2.3.
Process of Winding Up
708
ch. 36
Corporate Combinations
713
[§]36.1.
Combination Choices-Some Basics
714
[§]36.2.
Mergers
715
[§]36.2.1.
Effect of Merger
716
[§]36.2.2.
Statutory Protections in Merger
716
[§]36.2.3.
Short-Form Merger (Subsidiary into Parent)
718
[§]36.2.4.
Merger of Corporations Incorporated in Different States
719
[§]36.2.5.
Triangular Merger (and Compulsory Stock Exchange)
719
[§]36.2.6.
Squeeze-Out Merger
721
[§]36.3.
Sales of Assets
721
[§]36.3.1.
Effect of a Sale of Assets
722
[§]36.3.2.
Statutory Protections in Sale of Assets
723
[§]36.3.3.
Conditions for Triggering Protections
723
[§]36.3.4.
Comparison of Merger, Triangular Merger, and Sale of Assets
724
[§]36.4.
De Facto Merger and Successor Liability Doctrines
725
[§]36.4.1.
De Facto Merger Doctrine
725
[§]36.4.2.
Successor Liability Doctrine
726
ch. 37
Appraisal Remedy
735
[§]37.1.
Appraisal Rights
736
[§]37.1.1.
Transactions That Trigger Appraisal Rights
736
[§]37.1.2.
Shares Subject to Appraisal
738
[§]37.1.3.
Market Exception in Public Corporations
738
[§]37.1.4.
Comparison of Merger and Sale of Assets
740
[§]37.2.
Appraisal Proceeding
740
[§]37.2.1.
Procedures
740
[§]37.2.2.
"Fair Value"
742
[§]37.3.
Exclusivity of Appraisal
744
[§]37.3.1.
Price or Process Fairness
745
[§]37.3.2.
Nonappraisal Remedies
745
[§]37.3.3.
Effect of Choice
745
ch. 38
Federal Regulation of Tender Offers
751
[§]38.1.
Disclosure of Foothold Position
752
[§]38.1.1.
Schedule 13D Disclosure
752
[§]38.1.2.
Beneficial Ownership and Shareholder Groups
752
[§]38.2.
Federal Tender Offer Rules
753
[§]38.2.1.
Tender Offer Disclosure
753
[§]38.2.2.
Substantive Terms of Offer
754
[§]38.2.3.
Regulation of Issuer Self-Tenders
755
[§]38.2.4.
Regulation of Deception (but Not Unfairness)
755
[§]38.2.5.
Unorthodox Tender Offers
756
[§]38.3.
Williams Act Enforcement
757
[§]38.3.1.
Standing to Represent Target Shareholders
758
[§]38.3.2.
Remedies
758
ch. 39
Takeover Defenses
765
[§]39.1.
Dilemma of Takeover Defenses
765
[§]39.1.1.
Passive/Active Debate
766
[§]39.1.2.
Independence of Outside Directors
766
[§]39.1.3.
Board's Duties to Other Constituents
767
[§]39.2.
State Fiduciary Review
767
[§]39.2.1.
"Dominant-Motive" Review
768
[§]39.2.2.
Intermediate "Due Care" Review
769
[§]39.2.3.
Intermediate "Proportionality" Review
769
[§]39.3.
Board's Power to Adopt Takeover Defenses
781
[§]39.4.
State Antitakeover Statutes
786
[§]39.4.1.
History-Three Generations
786
[§]39.4.2.
Current Antitakeover Statutes
788
[§]39.4.3.
Constitutionality of Third-Generation Antitakeover Legislation
789
Table of Cases
795
Index
803