Please reply to the post below.
1- What rights does Bonsetti have (in most states) as a minority shareholder dissenting to the merger of GVG and Hula Boards? In most states, the rights of minority shareholders like Bonsetti are outlined in procedures such as the Revised Model Business Corporation Act (RMBCA), which sets several requirements for mergers and consolidations (Miller 828). As a member of the board of directors of Gnarly Vulcan Gear, Inc. (GVG), Bonsetti has a right to approve or disapprove of any mergers or consolidations.
2- Could the parties have used a short-form merger procedure in this situation? Why or why not? In this case, the parties could not have formed a short-form merger as the RMCBA 11.04 requires the parent company to have ownership of over 90% of shares in the subsidiary corporation (Miller 830). Bonsetti still owns the majority of GVG’s total shares, thus preventing the procedure.
3- What is the term used for Hula's offer to purchase GVG stock? Hula’s offer is considered a tender offer as Mai Jin Li offered to buy GVG stock at 30% above the market price per share (Miller 833).
4- Suppose that after the merger, a person who was injured on the Baked Chameleon board sued Hula (the surviving corporation). Can Hula be held liable for the injury? Why or why not. After Hula and GVG’s merger, Hula, as the surviving company is liable for GVG’s obligations and debts (Miller 827). Therefore, the corporation can be held liable for the injury.
The general language of corporate takeover laws in the United States gives substantial freedom to both the targets of acquisition and acquirers by allowing the latter to make offers and the former to accept or take defensive measures (Magnuson 206). The defensive strategies against takeovers stipulated in corporate law include the William Act, Business Combination (BC), Poison Pill (PP), Fair Price, and Control Share Acquisition (Pierce and Robinson 18). The Williams Act of 1968 began the modern era of regulations governing takeovers and inspired more rules in the same field (Magnuson 213). It mainly requires information disclosure by the acquiring corporations and sets up rules to regulate tender offers. While some of these methods have loopholes, such as the increase in the probability of hostile takeovers after PP validation, other methods such as BC are integral in significantly reducing hostile combinations (Cain et al. 5). Given the benefit in information disclosure and restraining-hostile environments, corporate law should not be amended to bar anti-takeover strategies. However, they can be amended to address the loopholes.
Cain, Matthew D, et al. “Do Takeover Laws Matter? Evidence from Five Decades of Hostile Takeovers.” DERA Working Paper Series, 2014, www.sec.gov/files/dera-wp-takeover- laws.pdf.
Magnuson, William. “Takeover Regulation in the United States and Europe: An Institutional Approach.” Pace International Law Review, vol. 21, no. 205, 2009, pp. 205-39.
Miller, Roger L. Business Law Today. 12th ed., Cengage Learning, 2020.
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