Fundamental changes - Mergers and divisions
3 important questions on Fundamental changes - Mergers and divisions
Why is shareholder ratification of mergers often also necessary when there is no alteration of the charter? TQ
P 185
Even without an amendment to the charter, a merger can qualify as a fundamental change. Corporate law is less concerned with formal legal identity than with the sheer size of the transaction and the possibility that it can radically alter the power and composition of the corporation.
Even without an amendment to the charter, a merger can qualify as a fundamental change. Corporate law is less concerned with formal legal identity than with the sheer size of the transaction and the possibility that it can radically alter the power and composition of the corporation.
What three strategies are generally adopted to prevent managerial nest-feathering? TQ
P 186
1. Shareholder approval requirements
2. Requiring approval by gatekeepers
3. An exit strategy - appraisal rights
1. Shareholder approval requirements
2. Requiring approval by gatekeepers
3. An exit strategy - appraisal rights
Why does EU law make companies receiving assets through a division jointly and severally responsible to pre-division creditors? TQ
P 195
Creditors' protection in the case of a corporate division requires particular attention, as there is a risk that creditor's claims will be impaired because the division of assets and liabilities is not necessarily pro-rata between the receiving companies
Creditors' protection in the case of a corporate division requires particular attention, as there is a risk that creditor's claims will be impaired because the division of assets and liabilities is not necessarily pro-rata between the receiving companies
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