Corporate Law Practice Exam

8/12/2019 Corporate Law Practice Exam

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PACE UNIVERSITY SCHOOL OF LAW

CORPORATIONS AND PARTNERSHIPS MAY 12, 2000PROFESSOR FISHMAN TIME LIMIT: 4 HOURSFINAL EXAMINATION OPEN BOOK

Pag 1 !" #

IN TAKIN$ THIS EXAMINATION, YOU ARE RE%UIRED TO COMPLYWITH THE SCHOOL OF LAW&S RULES AND PROCEDURES FOR FINALEXAMINATIONS' YOU ARE REMINDED TO PLACE YOUREXAMINATION NUMBER ON EACH EXAMINATION BOOK AND SI$NOUT WITH THE PROCTOR SUBMITTIN$ TO HIM OR HER YOUREXAMINATION BOOK(S) AND THE %UESTIONS AT THECONCLUSION OF THE EXAMINATION'

DO NOT UNDER ANY CIRCUMSTANCES, REVEAL YOUR IDENTITY

ON YOUR EXAMINATION PAPERS OTHER THAN BY YOUREXAMINATION NUMBER' ACTIONS BY A STUDENT TO DEFEAT THEANONYMITY POLICY IS A MATTER OF ACADEMIC DISHONESTY'

INSTRUCTIONS

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QUESTION I

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QUESTION II( 0 poi nt ! ) * o %+ ! 3 , $in %t & '

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QUESTION III

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CORPORATIONSE-AMINATION SPRING#00 0S AMPLEANSWERS

Q% & t io n I

(30 point'

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12/20

C!.7!.a3!+ a+5 Pa.+.837 Pag 12 !" 1P.!"!. F38/a+Ma6 12, 2000

>) UPA #(1): J;.6 7a.+ . 3 a+ ag+ "!. 8 7a.+ .837 "!. 87.7! !" 3 3+, a+5 8 a !" ; .6 7a.+. ''' 3+5 8 7a.+.837+* 8 7a. +. ! a3+g 8a 3+ " a +! a8!.3 6 ! a "!. 8 7a. +. 8373+ 8 7a.3*a. /a . , a+5 8 7.!+ -38 -8! / 8 3 5a*3+g 8a+!-*5g !" 8 "a 8a 8 8a +! 8 a8!. 36'J A*8!g8 $*a5*6 5!+! 8a; a a* a8 !.36, 8 -!*5 8a; a7 7a . + a8 !.36 (83 3 a+!.53+a.6 . a+a 3!+ "!. a !+ . 3!+ /a.3 a* 3+ ) -838 3+5 87a.+.837, +* 8 77*3. 8a +! 3 !" $*a5*6& *3/3a3 !+ !+ a a*a8!. 36' C!*5 8 7a. +. 837 *a3/ 77*3 . 3 !+ +!3 a !" 8a/!+ !" 8 7.8aG


13/20

C!.7!.a3!+ a+5 Pa.+.837 Pag 1< !" 1P.!"!. F38/a+Ma6 12, 2000

Q%&t ion II(0 point'

Pa. O+

1) Sa* !" a !" . a3* !. 53;33!+' T83 .=3. 8a. 8!*5 .a77.!;a* ' U+5. BCL #0# "!. !.7 ' "!./5 7. 1##, 3 . =3 . a ;! !"2< !" 8 8a.8!*5. + 3* 5 ! ;! ' F!. 8! "!./5 7! 1## 3" 8.3"3a ! 7.!;35 , a 12 ;! 3 + a .6 "!. 8 a* !" a** !.a+3a* *6 a** !" 8 a '

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14/20

C!.7!.a3!+ a+5 Pa.+.837 Pag 14 !" 1P.!"!. F38/a+Ma6 12, 2000

() T8 "a 5! +! ** -88. 8 +/. !" 5 3. !. 3 "395 3+8 . 3"3a !" 3+!.7!.a 3!+ !. 3+ 8 6*a-' I" 3+ 8 . 3"3a , 8+8a.8!*5. a++! , !+ 83. !-+ 3+33a 3;, a+ a/+5 /+ ' BCL 0() a+5 1(a), 8 "a 5!+! ** 8a 8. 3 a+6 8 7.!;33!+ 3+ 83 a ' T8."!. ,8a.8!*5. 5! +! 8a; 8 7!-. ! . 3+ a 8. '

H!-;. , a!.53+g ! Auer v. Dressel, 8a. 8!* 5. 8a; 8 7!-. !97. 8 3. !73+3!+ a+5 /a 83. ;3- +!-+ ! 8 !a.5 a! !.7!.a /a . , a+5 a 8a.8!*5. / 3+g a** 5 "!. 83 7.7! -!*5 a77.!7.3a' S8a.8!*5. !*5 ;! !+ a +!+3+ 53+g .!* 3!+ ! 8a"" a+5 !*5 a *! ! 8 /a+ag/ + & 7.!96 a /+ (-838 3-!*5 .=3.5 ! +5 ! ! +!3 8 73a* / 3+g) ! !*33 7.!93+5. R* 14a , a I a35, 8. &5 +! = 3 !+ !+ 8 7.!96 .* ,

8 14a 3 5!+ & !+'

Pa. T-!

1) Feder al Securi ties Laws Violations

Oprah Consults with Madden.

O7.a8 W. /a +, 8a 5 !" 73a* 7.!?, 535 +! .a5 , J!+*5J -38 D.' K! Ma55+' I 8 *3a* a a 377.G D3. ;' SEC a68a 3+35. / . a8 5 6 3+ 53*!3+g 3+"!. /a 3 !+ a+5 "! !+ 8

/! 3;a 3!+ !" 8 !.7!.a 3+35. 377. 3+ 53*! 3+g 3+"!./a 3!+' H., -5! +! +!- -86 W . /a+ !*5 Ma55+ ' S8 535 53. ga . 5 a !. 7!.a //! !.5.3+g !/7* 3*+ ' O+ 8 !8. 8a+5, W./a+ & !+* 3+g-38 a !** ag + ga g 5 3+ 3/3*a. . a . 8 /a 6 8a; + "!. a 7.! 7 .!.7!.a 7.7! ! ".8. 5;*!7/+ !" 8 7.!5 ' N! ;35+ 8a 8 3775 Ma55+ "!. a+6 7. !+a* ga3+, 38. 53. !. 3+53. , -838 -a8 3/7!.a+ "a!. 3+ D3.'


15/20

C!.7!.a3!+ a+5 Pa.+.837 Pag 1> !" 1P.!"!. F38/a+Ma6 12, 2000

Dr. Madden, ou tsi der who purchased shar es after We ster man consultedwith him.

U+5. D3., -88. 8 3 *3a* 57+5 !+: (1) 535 W./a+ .a8a 56G U+*a. a!; 533!+ a+5, 3" ! , (2) 535 Ma55+ +!- !.8!*5 8 8a; +!-+ 8a W./a+ .a85 8. 56G T83 3 +*3*6,+* 8 +!- a! !.7!.a //!'

I" W./a+ 535 +! .a8 8. 56 3+ !+* 3+g -38 Ma55+, 3 3 3** 7!3* ! 8!*5 Ma55+ *3a* a a /7!.a.6 3+35. +5. +! 14 !"D3.' H -a g3; + 8 3+"!. /a 3 !+ -38 a+ +5 . a + 53 +g 8 a 3 - a

!+"35+ 3a* a+5 -!*5 !+*6 5 "!. a77.!7. 3a !.7!.a 7.7!'

Lorraine Fenti man, invest m e n t an!er.

U+5. D3., 8 -!*5 +! *3a* a a 377 3+ Va+a & .a!+3+ 53*!3+g 3+"!./a3!+ ! 83/ -a "!. a+ a77.!7.3a !.7!.a 7.7! 'S8 /a 6 "!+ 5 *3a* a a /7 !. a .6 3+35 .' T8 53*! . !" 8 !6a+ 7.!? -a a a 3/ -8+ 8. -a +! 7*3 53*! . a+5 /a6 = 3;a* + !" 8 /3+.a* "3+5 3+ T$S' Va+a 53*!5 8 3+"!. /a3!+ !8. ! 7. a5 8. ! a.. a+g 5 "3+a+3 +g "!. 8 !. 7!.a 3 !+ ' O+ 8!8 . 8a +5 , F+3 /a + /a 6 a.g 8 a 8 7. 8a 5 8 8 a. , +! a

!" a+6 3+35 3+"!. /a 3! + *a.+ 5 a 8 / 3+ g, a 8 -a3/7.5 -38 Va+a & 3+ a/+'

"he Waiter.

H 7. 8a 5 8 a. , a 8 *35 8 35 a' I 83 .a 53 +g !+3+35 3+"!./a3!+G P.8a7 3+ 8 !+7 -a +! 7*3 +!-*5g 'B 3 3 +*3*6 8a 8 -!*5 !+35.5 a J/7!.a.6 3+35.J Va+a

535 +! 53*! a+6 3+"!./a3!+ ! 83/ -38 a+ +5.a+53+g 8a 8 -!*57 3 !+"35+ 3a* 8 -!*5 +! *3a* +5. D3., 3+ +3 8. 7a. !"8 -!7a. -!*5 / ' T8 7.!*/ a6 8a 8 *+8!+ /3+g-a a !/7a+6 8a5=a. . ' T8 -a3 . !* 5 "!+5 *3a* +5 . 8/3a7 7.! 7.3a 3!+ 8!.6' I" 8 *+8 ! + !.. 5 a a .a . a+ +!++5 -38 S!3 I+5. 3 , 8 -a3 . -!*5 8!/ ".'

S#$s first press release .


16/20

C!.7!.a3!+ a+5 Pa.+.837 Pag 1 !" 1P.!"!. F38/a+Ma6 12, 2000

T$S a+5 Ba3 ** 8a !. 7!.a 7. .*a /a6 ;3!*a R*10 > 3" 86 !+ a3 + a+6 "a* a+5 /3* a53 +g a /+ !. !/3 3!+ !"/a .3 a* "a + a . 6 ! /a a /+ +! /3* a53 +g ' T$S ** 8a g+ .a * !. !+*3!+a. 6 a /+ /a6 /3* a53 +g' O+ 8 !8 .8a+5, 8. 3 +! 83 +g ! gg 8 7. .* a -a /a5 "!. a+ 3/7.!7.7.7! !. 8a 3 -a 3+ +3 !+a**6 /3*a53+g' T8. "!., +! 3+.'

S#$s second press release.

H. 3 / 3 /a6 a+ !/3 3 !+ !" a /a .3 a* "a +! ! 53*!

8a 8 FDA -!*5 +! a**!- 8 5.!!73+g !" 8 +- 7.!? ' Aga3+, 8. 3a =3!+ !" 3+. '

2' C!/ /! + *a- . a 8 !" "353a.6 56 *a3/ ag a3+ Va+ a !. ! 8 .//. !" 8 !a.5 '

Vanessa $ s %& 'ear emplo'ment cont ract .

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a*a+ !" 8. !/7+ a 3!+ ;3!*a BCL 0 1 a+5 a/!+ ! 8 ! a.5 &a53a3!+ !" 3 53 ! /a+ag 8 !.7!.a3!+G

Stein$s "e(tile Mill which is sold to S#.

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A77.!;a* !" 8 . a+a 3!+ .=3. a /a?!.3 6 !" 8 53. !. 7.+! a77.!; a+ a3!+ (BCL 0(5))' T8, 8. ;! -!*5 .=3.5'

U+5. BCL 1


17/20

C!.7!.a3!+ a+5 Pa.+.837 Pag 1 !" 1P.!"!. F38/a+Ma6 12, 2000

T8, 8 .5 + !" 7.!!" -a 7!+ 8 !a.5 ! 5 /! + . a 8!+.a -a "a3. a 8 3/ 3 -a +.5 3+!'

"he )anitor

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18/20

C!.7!.a3!+ a+5 Pa.+.837 Pag 1 !" 1P.!"!. F38/a+Ma6 12, 2000

Q%&t ion III(30 point'

1) *irin+ of o+i Cohen

I 3 -88. a P. 35+ S8a=3** M8*3+ 8a5 8 a8!. 36 ! 83.!/!+ a g+ .a * /a+ag. a+5 ! g3; !" 8 g.! 7.!"3 ' I+ L ;'+3+, 8 !. a35 8a 8 7. 35+ !+*6 8a 8 a 8!.3 6 ! 3+5 83!/7a+6 6 a a.33+g 3+ 8 a * a+5 .g* a. !. !" 3+ +! "!. !+.a !" a+ 9 .a!.53+a.6 +a.'

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a77.! ; 8 a !+.a ' A = 3! + +! .a3 5 ".!/ "a 3 -8 8 .!.7!.a3!+ .a 3"35 8 !+.a '

2) Larr' Mushlin $s creation of -" an d Sale of Ser vices to -/a+el

D35 La..6 a a !.7!.a !77!.+3 6 ".!/ S!3 I+5 .3 G U+5.8 ALI a +5 a. 5 , 3 -!*5 / 8a La..6 8!*5 8a; .! g8 83!77!.+36 ! 8 !.7!.a3!+ (S'I') "!. a77.!;a* !. .? 3!+' H!-;., 3+; . 6! + +- a ! 3, 8 !.7 !. a3 !+ a + + ! 8a; .a3"35 8 a..a+g/ + ' I -a+ & 3+ ag* & *3+ !" 3+ , +!. 535 8 !.7!.a 3!+

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I+ 8 a !+ -838 8 3 3+ P.!*/ III 3 a5, R!3+!+ ;' B.3. ,412 Pa' 2>>, 1#4 A'25 204 (1#


19/20

C!.7!.a3!+ a+5 Pa.+.837 Pag 1# !" 1P.!"!. F38/a+Ma6 12, 2000

+a* ! a;a3* 3*" !" 8 !77!.+36' T83 -a 7.!a*6 . 8. !!' EBT7.!;355 3+"!. /a3!+ 8+!*!g6 .;3, a ! a "a. a- a6 ".!/ ag*a3+g a !+ a+ 3/ag3+'


20/20

C!.7!.a3!+ a+5 Pa.+.837 Pag 20 !" 1P.!"!. F38/a+Ma6 12, 2000

I+g* ;' $*a/!. M!!. Sa* 3+ 8 77 */+ 8!*5 8a a+ a -3**/ 7*! 6 , *3 Ma., a= 3. +! 9.a .3g8 5 ! 83 a a a8a.8!*5. 3+ 8 *! !.7!.a 3!+ 8a 8a 538a.g5 83/' T8 "a 8.. *!. ! $a**ag8. ;' La/. , a*! 3+ 8 77*/+ -8. 8 7*a3+ 3""-a "3.5 7.3!. ! a 7a. 3*a. 5a a" . -838 8 6 a 7.3 -!*5 8a;+ 83g8.' T8!g8 7*a3+3"" a**g5 a .a8 !" g!!5 "a3 8 a+5 "a3. 5a*3+g3+ 83 a a a 8a.8!*5., 8 !. ."5 ! .a5 !8. 8a+ 8 *3 .a */ a +3 +g !" 8 ag. / + ' T8 "a 7a . + 3+ 83 7.!* / 3 ! / - 8a 53"".+ a+5 3/3*a. ! !.5a+ ;' D"" P8*7 -838 I /+3!+5 3+ *a-83* - -. 53 3 +g 8 a !; -! *a ' I+ a 7*3 5 33! + 8

; + 8 3.3 "! +5 8 a 8 "a 8 ! /7 a +6 -a g!3+ g ! !*5 -a+!-+ ! 8 /7*!6 . a+5 -a a /a .3a* "a 8a 8!*5 8a; +53*!5 a+5 .a5 a+ 3 !" "a a ! 8 3 !" g!!5 "a38'

) 2rantin+ of Stoc! Options to Latrell

A!.53+g ! T9a $*", 8 g.a+3+g !" 8 !73!+ 6 8 !.7!.a 3!+! La. ** -a a 57 3 ; a ' H 8!* 5 8a; +! /a5 8 .= a 8a 3/ a 8 +- 8a 8 +g!3 a 3!+ -. g!3+g !+ ' I+ a + 83 3*3 S.!+g ;' R735 a+5 8 73a* 3./a+ .*' I" 8 !73!+ -.g.a+5 a 8 3+33a3; !" 8 !a.5, T9a $*" gg La.** 8!*5 a6,

JT8 3/ 3 +! .3g8J ! 8 !a.5'

) Marcu s$ s Attempt to -(ercise the Options

A". Ma. -a "3.5, 8 !*5 +! 9. 3 8 !73!+ 3" 86 -.. .3 5 ' T8a 3, 86 !*5 +! 9. 3 5 3" 86 -. !+ 3+g+ !+ /7*! 6/ + , a 8 !.7 !. a3 !+ -!*5 +! + "3' I - !*5 a*!57 + 5 !+ 8 7.3 a -838 8 6 -. 9.3 5 ' I" 8 !73! + -.+. .3 5 , 86 -!*5 8a; ; 5 a+5 Ma. !*5 8a; 7.8a5 8/'

#) Maurice Miller$ s 0urchase of Me+a a!eries

T83 3 a5 !+ a . "a a * 7a .+ 8a a77a.5 3+ 8 Wa** S.!.+a* 3+ Ma.8 !" 83 6a.' T83 3 a ;3!*a 3!+ !" 10 a+5 .* 10 > +5.8 /3 a77.!7.3 a 3 !+ 8!.6' T8 7.!"3 *!+g5 ! Mga' I 3 a*! a;3!*a3!+ !" R* 14

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Corporate Law Practice Exam