ALTERNATE CASE PROBLEM ANSWERS
CHAPTER 41
CORPORATE MERGER, CONSOLIDATION,
AND TERMINATION
41-1A. Corporate dissolution
(Chapter 41—Pages 805–806)
Robert would not be able to force the corporation into involuntary dissolution, but he could receive
some other equitable relief. A minority shareholder is “frozen out” when he or she is not allowed to
participate in the corporation because of actions by the majority shareholders. In small, family-operated
close corporations, shareholders seldom elect to have dividends declared because of the double tax
implications involved. Normally, the owners will work for the corporation and expect to receive the
corporation’s benefits by way of salaries and bonuses. Thus, when employment is the only method of
reimbursing the shareholders of a company, a minority owner that is fired is unable to recoup his or her
investment or receive any of the benefits of the corporation. Courts recognize this and offer equitable
41-2A. Purchase of assets
(Chapter 41—Pages 799–800)
B-178 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 41
other loses its existence as a separate entity; (3) when the purchaser continues the seller’s corporation
41-3A. Involuntary dissolution
(Chapter 41—Pages 805–806)
Yes. Albert should succeed in having the corporation dissolved and liquidated. Ordinarily, dissension
between the shareholders of a corporation is not sufficient to order the dissolution of the corporate
41-4A. Sale of assets
(Chapter 41—Pages 799–800)
The trial court granted summary judgment in favor of the manufacturer and the appellate court upheld
41-5A. Sale of assets
(Chapter 41—Pages 799–800)
Yes, the court granted the injunction. The court noted that the fundamental purpose in forming and
operating HJU Sales & Investments, Inc., “was, and continues to be, to engage in the restaurant
41-6A. Purchase of assets
(Chapter 41—Pages 799–800)
The trial court granted the seller’s motion for summary judgment, the appellate court reversed, and on
41-7A. Purchase of assets
(Chapter 41—Pages 799–800)
The Florida trial court granted summary judgment in favor of all defendants, including Glade and Grove.
41-8A. Appraisal rights
(Chapter 41—Pages 798–799)
B-180 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 41
The Superior Court of Connecticut held that statutory appraisal rights were the exclusive remedy for the
41-9A. Corporate dissolution
(Chapter 41—Pages 805–806)
Equipto moved for summary judgment. The Washington state trial court granted Equipto’s motion.
Yarmouth appealed. The state appellate court affirmed. J&R, and any corporation that is dissolved,
continues to exist for the purpose of winding up its affairs and liquidating itself. It does not have the
capacity to contract for any other purpose. The purchase of the work bench was not part of J&R’s
winding up, but part of its ongoing business. For this purpose, J&R did not have the capacity to contract.
Yarmouth claimed that he acted merely as an agent for J&R. The court applied the common law
principles of agency. “[A] person who purports to contract in the name of a principal that exists but
41-10A. Dissolution
(Chapter 41—Pages 805–806)
The court granted Aisha’s request for dissolution of Hina, but a state intermediate appellate court
reversed this order and dismissed the petition, because, in the court’s view, Aisha had filed her suit