text: NEW YORK CORPORATIONS Prof. Richard Freer Six fact patterns: 1. Organization of corporations 2. Issuance of stock 3. Directors and officers 4. Shareholders 5. Fundamental corporate changes 6. Controlling shareholders (and related topics) FACT PATTERN 1: ORGANIZATION OF NEW YORK CORPORATIONS I. FORMATION REQUIREMENTS (People, Paper, Acts) A. Incorporators (people) #1 What does an incorporator do? execute certificate and deliver to dept of state hold organizational meeting #2 How many incorporators do you need? ONE or more #3 Who can be an incorporator? Can BAR/BRI, Inc. serve as an incorporator for Curl Up and Dye Beauty Supply Corp.? Can Michael Jackson? natural person ~ adult human beings ONLY (no entities) – this is unusual o adult ~ b/c have to have capacity B. Certificate of incorporation (paper) (KNOW the terminology) 1. Purposes of certificate a. it=s a contract between corporation and shareholders b. it=s also a contract between corporation and state 2. This information goes into the certificate a. Names and addresses (1) Corporate name #4 Can I form a corporation with the name Bubba=s Bountiful Biscuits? NO – m/h one of three words "corporation" / "incorporated" / "limited" (spelled out or abbreviated) 1 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #5 (2) County in NY where office of corporation will be located #6 B Does the Aoffice of corporation@ have to be a place where the corporation actually does business? NO #7 (3) Who must you designate as the corporations agent for service of process? NY secy of state #8 B What other information must be given for service of process? address for forwarding process (goes in the certificate) B In addition to the Secretary of State, you may (but don=t have to) name a registered agent for service of process. (4) Name and address of each incorporator m/b included as well #9 b. May make a statement of duration. What if the certificate contains no statement of duration? if nothing stated presume perpetual existence c. Corporate purpose -- statement is required. this is REQUIRED but … (1) Could be a general statement of purpose. #10 Can the certificate of Bubba's Bountiful Biscuits, Inc. indicate that the corporation=s purpose is to Aengage in all lawful activity, after first obtaining necessary state agency approval@? YES – this is what always do in real world (2) Could be a specific statement of purpose. #11 MBE classic - What if the certificate of Bubbas Bountiful Biscuits, Inc. indicates that the corporation's purpose is to "sell Southern-style sausage biscuits" and the corporation later sells T-shirts as well as the biscuits? Selling T-shirts is an ultra vires act (beyond the scope of the certificate). At common law, that would mean the contract could be voided as beyond the capacity of the corporation. How do we handle ultra vires today? 2 2/4 BAR/BRI Bar Review New York Course CORPORATIONS this is an ultra varies act (~ beyond the certificate ~ certificate is a K w/ the state) ultra varies acts - o K are valid and enforceable do not void as used to do o S/H can seek injunction to stop ultra varies acts before it occurs Liability o responsible O&D are personally liable to the corporation for ultra varies losses d. Capital structure (stock) (1) Authorized stock: maximum number of shares the corporation can sell. Issued stock: number of shares the corporation actually sells. Outstanding stock: shares that have been issued and not reacquired by the corporation. #12 (2) What must be included in the certificate? authorized stock + number of shares per class + class information (~ par value / rights / preference / limitations on stock) + info on series (a sub-class) of preferred shares But note: at least one class of stock OR bonds must have unlimited voting rights and at least one class of stock must have unlimited dividend rights. C. Acts. #13 Each incorporator signs certificate and acknowledges it before a notary. They deliver it to the New York Department of State. If it conforms with law, and filing fees are paid, the Department files the certificate. What is the effect of the Department=s filing? we deliver the certificate to Dept. of State Dept files the certificate serves as conclusive proof of valid formation de jure corporation #14 Then the incorporators hold an organizational meeting (or they can do it by written consent). What do they do at the organizational meeting? adopt any by-laws + elect initial directors II. LEGAL SIGNIFICANCE OF FORMATION OF CORPORATION A. Internal affairs (duties, relationship among directors, officers, shareholders, etc.) of a New York corporation are governed by New York law. B. A corporation is a separate legal person. It has broad powers by statute, including the power to enter contracts, transfer property, buy and sell securities (its own or others=), and to sue or be sued. #15 B Can a corporation make political contributions? YES – BUT limited to $5000 per year per candidate / organization 3 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #16 B Can a corporation make charitable contributions? YES – no statutory ceiling #17 C. Because the corporation is a separate entity, generally, the people who run it (directors and officers) are not liable for its obligations. And the owners (the shareholders) generally enjoy "limited liability", which means that a shareholder only has to pay for her stock, and not any corporate liability. #18 B So who is liable for corporate debts and obligations? corporation is liable III. DE FACTO CORPORATION DOCTRINE/CORPORATION BY ESTOPPEL not much of a big deal here – rarely tested Doctrines by which a business failing to achieve de jure corporate status nonetheless is treated as a corporation (KEY POINT - so shareholders will not be personally liable for business debts). A. De Facto Corporation: 1) there is a relevant incorporation statute; 2) the parties made a good faith, colorable attempt to comply with it; and 3) some exercise of corporate privileges. If applicable treated as corporation for all purposes EXCEPT in an action by the state, so it=s as good as being de jure (except in an action by the state) -- Status in New York: because the Department of State's filing the certificate is conclusive proof of formation, the doctrine was thought to be abolished. BUT case law suggests it may be alive, at least in limited circumstances. -- For example, say the incorporators put together a proper certificate and deliver it to the Department of State, but the Department failed to file it (without rejecting it). Not de jure, because not filed. Can argue de facto corporation if meet the test. #19 B. Corporation by Estoppel: theory is that one dealing with a business as a corporation, treating it as a corporation may be estopped from denying the business=s corporate status. So such a person, under this theory, cannot sue the individual proprietors. BUT … NY - is abolished in NY IV. BYLAWS A. De jure corporation can exist without bylaws; adoption of bylaws is not a condition precedent to formation of a corporation. But almost every corporation has them. Why? They can establish internal procedures and responsibilities of people like officers, set forth the type of notice required for meetings, etc. almost impossible to come up with question b/c w/h to tell you the by-law #20 B. If bylaws are inconsistent with the certificate, which document controls? certificate controls ~ b/c the K w/ the state(is more important) 4 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #21 B Are bylaws filed with the state? NO – are purely internal documents #22 B Are outsiders bound by bylaws? NO – are purely internal documents #23 C. Who adopts the initial bylaws? the incorporators (see question 14 above) have status of a S/H by-law (we will see significance later) #24 D. Who can amend or repeal the bylaws or adopt new ones? S/H #25 B When does the board of directors ever get to amend or repeal bylaws or adopt new ones? only if / when certificate OR a S/H by-law allows (And shareholders can amend or repeal any director-adopted bylaw.) V. PREINCORPORATION CONTRACTS highly tested - A. A promoter - is a person acting on behalf of a corporation not yet formed. For example, she might enter a contract with a third-party on behalf of the corporation-not-yet-formed. Liability B. Liability on preincorporation contracts 1. Corporation liability - A corporation is not liable on preincorporation contracts until it adopts the contract. th On January 10 , P, acting as a promoter for a corporation not yet formed, leases a building from David Epstein and signs the lease AOscar de la Rental Cars, Inc.@ th On February 20 , Oscar de la Rental Cars, Inc. is incorporated. #26 Is the corporation liable on the contract? YES IF it adopted the K B How can adoption happen? #27 (1) Express adoption: by BOD action (question 76) #28 (2) Implied adoption: corporation's knowing acceptance of a bene of the K 2. Promoter liability - Generally, unless the contract clearly indicates that the parties do not Liability intend the promotor to be liable, the promoter remains liable on preincorporation 5 2/4 BAR/BRI Bar Review New York Course CORPORATIONS contracts until there has been a novation, i.e., an agreement of the promoter, the corporation, and the other contracting party that the corporation will replace the promoter under the contract. MBE will probably test this (are not going to tell us that promoter does not have liability) B Here, we=ll assume the contract does NOT indicate that the promoter will not be liable. #29 B Will P be liable on the lease if Oscar de la Rental Cars, Inc. is never formed? YES #30 B Will P be liable on the lease if Oscar de la Rental Cars, Inc. is formed and adopts the lease? YES – b/c still no novation #31 B The adoption makes the corporation liable too, but does not relieve P. So on the facts here, who would be liable on the lease? adoption makes the corporation liable BUT does not relieve the promoter BOTH are liable Liability VI. SECRET PROFIT RULE (~ promoter dealing with corporation itself) - Promoter cannot make a secret profit on her dealings with the corporation. A. Sale to corporation of property acquired BEFORE becoming promoter [Profit equals price paid by corporation minus fair market value (FMV)] #32 January 10, P begins working as a promoter; April 4, P sells corporation Green Acres for $40,000; P bought Green Acres in 1931 for $1.98. Is there any profit here? no Profit here if property FMV ≥ $40,000 we do not care what P paid for it B. Sale to corporation of property acquired AFTER becoming promoter [Profit equals price paid by corporation minus price paid by promoter] #33 January 10, P begins working as a promoter; February 20, P buys property for $18,000; March 3, P sells that property to corporation for $25,000. Is there any profit here? YES - $7,000 #34 So in the last hypo, P made a profit of $7000. Is P liable to corporation for that $7000? YES – if the profit was secret (i.e., did not disclose it to the corporation) NO – if BOD consents OR ratifies the profit Simple solution – she simply discloses the profit 6 2/4 BAR/BRI Bar Review New York Course CORPORATIONS VII. FOREIGN CORPORATIONS rarely tested only one rule … Foreign corporations + doing business in New York must qualify. A. A foreign corporation is one incorporated outside New York. #35 B Is a New Jersey corporation Aforeign@? YES B. Doing business means the regular course of intrastate, not interstate, business activity. Not occasional or sporadic business. Not just having meetings in New York, etc. C. The foreign corporation can qualify by applying to the N.Y. Department of State and designating the Secretary of State as agent for service of process. #36 B In applying to qualify, what kind of information does the foreign corporation give the N.Y. Department of State? 1) info fro its certificate 2) proof of good standing in its home state #37 D. What happens if a foreign corporation transacts business in N.Y. without qualifying? 1) penalty applies when the corporation does qualify 2) until it qualifies cannot sue in NY BUT can be sued in NY FACT PATTERN 2: ISSUANCE OF STOCK I. WHAT IS ISSUANCE? #38 Issuance of stock occurs when a corporation sells OR trades its own stock remember – all of rules in this section apply only during an issuance (not re secondary distribution) Issuance of stock is one way a corporation can raise capital. Investors buy stock and thereby become equity holders -- owners of the corporation. Their equity interest brings with it various rights we will see. This is to be distinguished from issuance of bonds. With a bond, the investor makes a loan to the corporation, to be repaid (usually with interest) as agreed in the contract. The holder of a bond is a creditor (not an owner) of the corporation. #39 What is a "debenture"? 7 2/4 BAR/BRI Bar Review New York Course CORPORATIONS a loan the repayment of which is NOT secured by corporate assets #40 B Mayberry Realty Corp. sells 10,000 shares of Mayberry stock. Is that an issuance? YES – b/c corporation sold its own stock #41 B Barney Fife sells 3,000 shares of Mayberry stock. Is that an issuance? NO – b/c corp not selling own stock II. SUBSCRIPTIONS A. A subscription is a written, signed offer to buy stock from the corporation. One important consideration is whether a subscription can be revoked. B. Revocation of preincorporation subscriptions th #42 B On January 10 , S signs a subscription, offering to buy 100 shares of C Corp., a corporation not yet formed. A week later, S changes his mind. Can S revoke? NO – pre-incorporation subscription is irrevocable for 3 months UNLESS EITHER it says O/W OR all subscribers agree #43 Why is this the rule? so people forming the corporation can rely on the money being there w/b unfair if subscribers could pull the rug out #44 C. Are post-incorporation subscriptions revocable? YES – can revoke any time UNTIL acceptance #45 D. When do the corporation and the subscribers become obligated under a subscription? when the BOD accepts the offer at that moment an agreement exists (At that point, there is an agreement to sell to this subscriber.) #46 Can the corporation decide to sell only to some subscribers and not others? the call m/b uniform w/i each class or series cannot discriminate w/i a class D. If the subscriber defaults on payment, what happens? NY rule is intricate but RARELY tested 1. If he has paid less than half of the purchase price, and fails to pay the rest within 30 days of written demand, the corporation can keep the money paid and cancel the shares. The shares then become authorized and unissued. 8 2/4 BAR/BRI Bar Review New York Course CORPORATIONS 2. If subscriber has paid half or more, and fails to pay the rest within 30 days of written demand, the corporation must try to sell the stock to someone else for cash (or a binding obligation to pay cash). What happens if no one will pay the remaining balance? Defaulting subscriber forfeits what he has paid and the shares are canceled. #47 What happens if someone will pay more than the remaining balance due? defaulting subscriber recovers any excess over (what he agreed to pay PLUS corporation's expenses in selling) III. CONSIDERATION - what must the corporation receive when it issues stock? IMPORTANT for BAR - A. Form of Consideration. #48 What are the five permitted forms of consideration for an issuance? 1. money ~ cash or its equivalent (~ a check) 2. tangible or intangible property 3. labor / services performed for the corporation's benefit – includes that expended for forming the corporation 4. binding obligation to pay in the future in cash OR in property (~ note) 5. binding obligation to perform future services having an agreed value #49 Can the corporation issue stock to somebody for performing services in setting up the corporation? YES – labor or services performed for corp's benefit counts in NY (most states say no b/c no corporation existed when labor performed What are prohibited forms of consideration? Anything other than the five permitted forms of consideration. #50 What happens if somebody "pays" for an issuance with an improper form? it is unpaid stock means it is all treated as water (see later) BUT is difficult to have improper form for consideration B. Amount of Consideration. 1. Par - means "minimum issuance price." 9 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #51 If C Corp. issues 10,000 shares of $3 par stock, it must receive at least: $30,000 #52 Can it issue this stock for more than $30,000? YES #53 2. No par - means there is no minimum issuance price. Can sell for any price. Who sets the price at which to sell no par stock? BOD does UNLESS certificate reserves the right to the S/H 3. Treasury stock- is stock that was previously issued and had been reacquired by the corporation. The company may then sell the treasury stock. #54 C Corp. is selling $3 par treasury stock. It must receive at least what? no minimum ALWAYS treat T/S as no par stock 4. Acquiring property with par value stock. Can C Corp. issue 5,000 shares of $3 par to acquire Vince Alexander's farm? ALWAYS use this order … #55 1) Is the form of consideration OK? YES – tangible property is OK #56 2) Is the amount of consideration OK? YES – IFF farm FMV ≥ $15,000 The board always values the consideration in a par issuance; in no-par; board values consideration unless certificate allows shareholders to do so #57 When the board determines the value of the consideration for an issuance, is its determination of value conclusive? note for MBE YES in the absence of fraud (~ see question 58) #58 Corp. issues $1,000,000 worth of its stock to pay a director's nephew for providing one week=s worth of cleaning services for Corp. Got a problem with that? this is obviously fraud wasting corporate assets Liability BOD liable for wasting corporate assets 10 2/4 BAR/BRI Bar Review New York Course CORPORATIONS 5. Consequences of issuing par stock for less than par value; i.e., Awatered stock.@ note for MBE Liability C Corp. issues 10,000 shares of $3 par to X for $22,000. The corporation (or creditors if the company is insolvent) can sue for the $8,000 of Awater.@ #59 Are the directors be liable for the water? YES - if knowingly authorized the issuance #60 Is X (the guy who bought the watered stock) liable? YES – you are charged with notice of the par value (this is the first time we have seen S/H liable for anything) #61 What if X buys the watered stock and transfers it to a third-party (TP)? TP – NOT liable if acted in GF (~ did not know about the water) she does not have to pay value (does not have to be a bona fide purchaser) rd could be a 3 party transferee But TP's status has no effect on liability of X and the directors. IV. PREEMPTIVE RIGHTS note for MBE – BAR hits every one of the picky details A. Preemptive right is the right of an existing shareholder to maintain her percentage of ownership by buying stock whenever there is a new issuance of common stock AND for money (which includes cash or checks). #62 Does "new issuance" include sale of treasury stock? NO – UNLESS the certificate says O/W #63 Does "new issuance" include sale of shares authorized by the original certificate and sold within two years of formation? NO – UNLESS the certificate says O/W #64 S owns 1,000 shares of C Corp. There are 5,000 shares outstanding. C Corp. is planning to issue an additional 3,000 shares. If S has preemptive rights, then S has the right to do what? to buy 600 shs B. If the certificate of incorporation is silent regarding preemptive rights - do they exist? THE ANSWER DEPENDS UPON WHEN THE CORPORATION WAS FORMED. 11 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #65 corporations formed before February 22, 1998: YES do exist UNLESS the certificate says no (i.e., YES if certificate is silent) #66 corporations formed on or after February 22, 1998: NO – unless the certificate provides for it REMEMBER – in this case Feb 22 goes w/ new law (in every other case, it goes with the old law) #67 Suppose the certificate provides for preemptive rights and C Corp. is issuing stock to G to acquire Green Acres from G? Are there preemptive rights? NO – this is not a new issuance for money (this is for property) FACT PATTERN 3: DIRECTORS AND OFFICERS I. STATUTORY REQUIREMENTSCDIRECTORS A. Number of directors: one or more adult natural persons. The number can be set in bylaws or by shareholder action, or by the Board if a S/H-adopted bylaw allows the Board to do it #68 What if no number of directors is set in any such way? will have ONE Dir #69 B. Incorporators elect initial directors. After that, who elects directors? S/H elects Dir at annual meeting Do we have to elect all new directors every year? No, there can be a "classified board" with 2, 3, or 4 classes of directors, with one class elected each year. #70 How many directors must be in a class? at least 3 So if we had 9 directors, we could elect all 9 each year and they would have one-year terms. OR we could have 3 classes of 3 directors each, and each year we would elect 3 directors; they would serve 3-year terms. C. Removal of directors before the expiration of their term. #71 Can shareholders remove a director for cause? YES 12 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #72 Can the board remove a director for cause? YES – if permitted in the certificate OR by-laws BUT must be for cause #73 Can anyone remove a director without cause? only the S/H AND only if the certificate OR by-laws allows it (Director cannot be removed if cumulative voting (question 175) is in effect and the number of votes cast against removal would have elected her.) D. Filling a vacancy on the board (e.g., a director dies or resigns or is removed). #74 General rule: who selects the person who will serve the remainder of the term? remaining Directors simply vote on this #75 Special rule: who selects the person who will serve the remainder of the term when a director is removed by shareholders without cause? S/H must select the replacement (BUT this is very rare b/c can only remove Dir w/o cause if it certificate / by-laws allows is) E. How the board of directors acts. note for MBE #76 1. There are only two ways in which the board can take a valid act: unanimous AND written consent to act w/o a meeting a meeting (If neither is met, the "act" taken is void unless later ratified by a valid act.) #77 If we have a meeting, must it be held in New York? NO – can be held everywhere Is a conference call OK? Yes IF the directors can hear all participating directors simultaneously (UNLESS the certificate or bylaws provide that no conference call meetings are allowed). 2. Notice requirements for board meetings. note for MBE #78 Is notice required for regular meetings? 13 2/4 BAR/BRI Bar Review New York Course CORPORATIONS NO – not for regular meeting (ordinarily is that this is set up in the by-laws) #79 Is notice required for special meetings? YES – statute only says that notice is required (method can be established in the by-laws) What happens if required notice for a special meeting is not given to a director? Any action taken at the meeting is void unless the director not given notice waives the notice defect. #80 How can she waive the notice defect? can waive in writing AND signed any time at all by attending the meeting without objection #81 3. Can a director give a proxy for director voting? NO – this is against public policy #82 4. Can directors enter voting agreements on how they will vote as directors? NO – this is against public policy This is void 5. Quorum for a meeting. To do business, we must have a majority of entire board (duly constituted board ~ means the number of positions if no vacancies). Once we have a quorum, though, passing a resolution (which is how the board takes an act at a meeting) requires majority vote of those present. note for MBE #83 If there are 9 directorship positions on the board, at least _5_directors must attend the meeting to constitute a quorum. If 5 directors attend, at least _3_directors must vote for a resolution for it to pass. #84 Suppose there are nine directorship positions on the board. Five of the directors show up at a properly called meeting, but then one of them leaves the meeting. Can the board continue to do business? NO – Quorum is broken once no longer have quorum can no longer do business #85 Suppose there are nine directorship positions on the board, but two of the directors have resigned and no successors have been selected. So there are only seven directors actually serving now. How many must show up at a meeting to constitute a quorum? 5 – need a majority of the entire BOD / duly constituted BOD #86 Can the corporation decrease a quorum to less than a majority of directors? note for MBE YES in certificate or by-laws BUT can never be fewer than 1/3 of the directors 14 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #87 Can the corporation decrease the requirement that passing a resolution requires a majority of the directors present? note for MBE NO – cannot decrease the voting requirement #88 Can the corporation increase a quorum to greater than a majority of directors (e.g., two- thirds of the entire board must be present to do business)? note for MBE YES – but in the certificate only (CANNOT be done in the by-laws) #89 Can the corporation require a supermajority vote to pass a resolution (e.g., two-thirds of the directors present must approve the resolution)? YES – but in the certificate only (CANNOT be done in the by-laws) II. ROLE OF DIRECTORS A. Generally, board of directors manages business of corporation. It sets policy, monitors and supervises officers, declares dividends and other distributions, recommends fundamental corporate changes, etc. B. If the certificate or bylaws allow, a majority of the entire board can delegate substantial management functions to a committee of ONE or more directors. But, the board cannot delegate all powers and responsibilities to a committee. #90 What can a committee NOT do? amend / repeal / adopt by-laws recommend action to S/H requiring S/H approval (~ fundamental corp Δs m/b recommended by full BOD) fill BOD vacancy set Dir compensation #91 Can a committee recommend any of these things for full board action? YES – can recommend all of these things #92 What is a particularly important area in which committees are used? S/H derivative suits (see question 147) III. DUTY OF CARE Liability note for MBE – most important in corp area 15 2/4 BAR/BRI Bar Review New York Course CORPORATIONS Duty of Care Standard: A director must discharge her duties in good faith and with that degree of diligence, care and skill that an ordinarily prudent person would exercise under similar circumstances in like position. (MEMORIZE) A. Nonfeasance (director does nothing) Dir does nothing at all #93 Justin Timberlake, a director of C Corp., fails to attend any of the board of directors= meetings or to keep abreast of the business. Will he be held liable for breach of duty of care? for analysis of an essay question … -- State the duty of care standard. -- Apply the Standard - An ordinarily prudent person would attend some meetings. Justin never attended any meetings and did not stay abreast of the business, so he breached the duty of care. BUT he is liable only if: causation - his breach caused a loss to the corporation (this is tough b/c corp often w/h lost money any way (BUT past exam said anti-trust expert failed to show up + corp took action that violated A/T laws this was sufficient causation for breach) Liability B. Misfeasance (board does something that hurts the corporation) this involves the business judgment rule (BJR) #94 The directors of Hedonists= Hot Tubs, Inc. vote to start a new product line of hot tubs with built-in wine coolers and video cameras. The idea is a disaster and the company loses money. Are the directors liable for breach of the duty of care? -- State the duty of care standard. -- Apply the Standard Here, the directors= decision caused the corporation to lose money. BUT Dir is NOT liable if meets the BJR Prudent ~ prudent people do appropriate homework deliberate + inquire BJR: A court will not second-guess a business decision if it was made in good faith, was reasonably informed (~ did homework), and had a rational basis usually liable only if negligent or NOT acting in G/F IV. DUTY OF LOYALTY note for MBE – MEMORIZE for the BAR Liability Duty of Loyalty Standard: a director must act in good faith and with the conscientiousness, fairness, morality and honesty that the law requires of fiduciaries. #95 Why does the BJR not apply in duty of loyalty cases? 16 2/4 BAR/BRI Bar Review New York Course CORPORATIONS b/c these cases involve conflict of interest (BJR no longer relevant here) A. Interested Director Transaction - any deal between the corporation and one of its directors Liability (or business of which its director is also a director or officer or in which he has a substantial financial interest). #96 Martha is a director of XYZ, Inc. If she sells wreaths to the corporation, it is an interested director transaction. Is Martha in trouble? -- State the duty of loyalty standard. -- State the Mechanical Rule - Interested director transactions will be set aside UNLESS the director shows either (1) the deal was fair and reasonable to the corporation when approved OR (2) the material facts and her interest were (disclosed OR known) and the deal was approved by any of these: (A) S/H (B) BOD approval by sufficient vote NOT counting the interested Dir (C) unanimous vote of disinterested directors IF interested Dir needed for a quorum #97 -- There are nine directors. Five of them are interested in an interested director transaction. All nine attend the meeting to consider approving the deal. After appropriate disclosure, what vote could approve the deal? need vote of all four disinterested Dir Board can set compensation of directors in any capacity, UNLESS certificate or bylaw say can't. Compensation must be reasonable and in good faith. If excessive, it is waste of corporate assets. as fiduciaries – Dir cannot waste corp assets is a waste of corp assets #98 Sometimes a corporation may want to give a director or officer stock options as an incentive to service. If the stock is listed on a stock exchange, such use of options must be authorized under exchange policies. What if the stock is not listed on a stock exchange? this use of options m/b approved by S/H vote Liability B. Competing Ventures #99 Pedro and Don are officers and directors of the Baseball Boxing Academy, Inc. (BBA). Don may also serve on the board of directors of the Sierra Club, because it does not compete with BBA. But can Don start his own boxing academy? -- State the duty of loyalty standard. -- State the rule - Director cannot go into competition with his corporation (b/c a 17 2/4 BAR/BRI Bar Review New York Course CORPORATIONS fiduciary). What happens if he does? corp gets a constructive trust on his profits Liability C. Corporate Opportunity #100 Cheatem is a director of C Realty Corp., which develops condo projects. Cheatem learns of some land that has been zoned for condos and buys it for himself as an investment. What are C's rights, if any, against Cheatem? -- State the duty of loyalty standard. -- State the Rule - Director cannot USURP a corporate opportunity. What does that mean? cannot usurp ~ cannot take the opportunity UNTIL BOTH informs corp of its existence AND waits for BOD to reject it #101 What qualifies as a corporate opportunity? something corp needs OR has an interest or tangible expectancy in OR that is logically related to its business If there is a usurpation, the usual remedy is a constructive trust. So if Cheatem still has it, he must sell it to the corporation at his cost. If Cheatem has sold it at a profit, the corporation gets the profit. note explanation of how constructive trust works V. OTHER STATE LAW BASES OF DIRECTOR LIABILITY Liability #102 A. Ultra vires acts. We did this on page _3 Question 11_. #103 B. Watered stock. We did this on page _? Question 59_ . C. Improper loans Sarbanes-Oxley Act – one part prohibits corps from giving loans to executives BUT only applies big publicly traded corps NY has never tested federal law on the Bar exam The board of directors votes to lend a director $100,000 of corporate funds. OK? APPROVAL REQUIRED DEPENDS ON WHEN CORPORATION WAS FORMED. For corporations formed on or before February 22, 1998: shareholder vote (in which a quorum is a majority of disinterested shares), UNLESS the certificate allows board to decide that a loan benefits the corporation. 18 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #104 For corporations formed after February 22, 1998: need a BOD conclusion that the loan benefits the corp – S/H approval would probably work BUT BOD conclusion easier to get than S/H approval Liability #105 D. Improper distributions. We will do this in (question 194) . E. For these or any other thing a director can be liable for, exactly which directors are liable? 1. General rule. #106 A director is presumed to have concurred with board action UNLESS her dissent is noted in writing in corporate records. How does the director do that? in the minutes in writing to corp secy at the meeting registered letter to corp promptly after adjournment Director cannot dissent if voted for the resolution at the meeting. 2. Exceptions to the general rule. #107 a. What if a director missed a meeting, maybe because he was sick that day. Is he liable if the board approved something wrongful that day (like an illegal dividend)? NOT liable if Dir registers a written dissent w/i reasonable time after learning of the action He does this by - delivering the dissent or sending it by registered mail to the corporate secretary, ensuring that the dissent is filed with the minutes for the meeting. b. Good faith reliance on information, opinions, reports, or statements by (1) officers or employees of the corporation whom the director or officer believes competent and reliable, (2) lawyers or public accountants whom the director or officer believes are acting within their competence, or (3) a committee of which the person relying is not a member, as to matters within its designated authority. #108 This exception might be especially likely in a case involving: improper distributions (see tomorrow in question 194) VI. OFFICERS Liability A. Duties: officers owe the same duties of care and loyalty as directors. 19 2/4 BAR/BRI Bar Review New York Course CORPORATIONS B. Status: officers are agents of the corporation, so they can bind the corporation to deals if they have agency authority to do so. (Watch for a cross-over issue with agency.) C. The Board may select - a president, one or more vice-presidents, a secretary, a treasurer, and any others the Board may determine or for which the bylaws provide. sky is the limit Can one person hold multiple offices simultaneously? Yes. The statute says two things, which seem a bit contradictory. First, it says that any two or more offices may be held by the same person. It also says that when all of the stock is owned by one person, that person may hold all offices. despite potential conflict Prof says to rely on first sentence D. Selection and removal of officers. #109 Who selects and removes the officers? BOD UNLESS the certificate allows the S/H (If the shareholders elect them, only the shareholders can fire them. Even then, for cause, directors can suspend an officer=s authority to act.) #110 The directors of Viagra Corp. appoint Bob Dole as president. What if the directors later fire Bob from the presidency? Liability corp may be liable for breach of K damages crossover w/ K So remember the hierarchy. As general rules: #111 Who hires and fires directors? S/H #112 Who hires and fires officers? BOD #113 So, as a general rule, do shareholders hire and fire officers? NO – generally not UNLESS certificate allows E. Judicial action. The attorney general or holders of 10 percent of all shares may sue for a judgment removing an officer for cause. Court can bar reappointment of a person so removed from office. an end around the limit on S/H ability to remove officers #114 F. Compensation of officers. Who sets it? 20 2/4 BAR/BRI Bar Review New York Course CORPORATIONS BOD VII. INDEMNIFICATION OF DIRECTORS AND OFFICERS A. Situation: a person is sued in her capacity as officer or director and incurs costs, attorneys= fees, maybe even fines, a judgment or settlement; she seeks reimbursement from the corporation. watch for this e.g., 1. In an action by or on behalf of the corporation, there are three possibilities: #115 a. Prohibited: reimbursement is prohibited if if the officer / director was held liable to the corporation #116 b. Of right: the corporation must reimburse the director or officer if: if O&D was successful in defending on the merits or O/W (~ she won a judgment in her favor #117 Suppose a director or officer is successful in defending a suit against her, so she qualified for reimbursement of right from the corporation. But the corporation refuses to reimburse her. Now she sues the corporation to force it to reimburse her, and wins. Can she recover the attorneys fees of this suit against the corporation? NO – stat requires corp to reimburse only for the underlying suit against her controversial b/c right to reimburse is worthless if corp <> reimburse #118 c. Permissive: Situation not satisfying (a) or (b), the corporation may reimburse the officer or director. What must she show for this? any other case than Prohibited or Of right BUT O&D must show acted in G/F and for purpose reasonably believed t/b in the corp best interests Reimbursement in the "permissive" category can include settlement amount, expenses and attorney's fees (BUT NOT any judgment against the O&D, though). For permissive, who determines eligibility? a. The Board (with a quorum of directors being non-parties); or, if there is no such quorum, b. Shareholders OR a quorum of those directors who are disinterested; or c. The Board pursuant to report from independent legal counsel. 2. In an action by or for someone other than the corporation, reimbursement is permitted if 21 2/4 BAR/BRI Bar Review New York Course CORPORATIONS the director or officer shows she acted in good faith and for a purpose reasonably believed to be in the best interest of the corporation. (In a criminal case, must also show she had no reason to believe her conduct was unlawful.) Reimbursement here can include judgment, settlement, expenses and attorney's fees. should be rare 22 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #119 B. Can the court in which the officer or director gets sued order the corporation to indemnify the officer or director for litigation expenses and attorney's fees? YES – if it finds that O&D is fairly and reasonably entitled to it C. Certificate or bylaws can provide for indemnification by resolution of board or shareholders or by agreement, unless the director or officer acted in bad faith, was deliberate and dishonest in a way material to the case or wrongfully profited. certificate can actually say that Dir w/n/b liable to corp BUT this is limited as stated #120 D. Can the corporation advance advance litigation expenses to the director or officer? YES – but must be repaid if turns out O&D is not entitled to indemnification E. Corporation can buy insurance to cover director and officer liability. F. And reimbursement can never be allowed - if it would be contrary to a provision in the certificate or bylaws or board or shareholder resolution or agreement in effect at time the cause of action accrued. FACT PATTERN 4: SHAREHOLDERS I. HOLDING SHAREHOLDERS LIABLE FOR DEBTS OF CORPORATION Liability A. Generally, a shareholder is not liable for the debts or acts of a corporation. But a court may pierce the corporate veil (PCV) and hold shareholders personally liable IF they have abused the privilege of incorporating and if fairness demands that the shareholders not have limited liability. #121 PCV is extraordinary. Why? b/c corp is liable as an entity for what it does #122 B. The PCV standard. Why might New York courts PCV? the standard ~ to prevent fraud or to achieve equity 1. Alter ego (identity of interests, agency, excessive domination) #123 X and Y are the shareholders of C Corp. X is also the chief executive officer. X commingles personal and corporate funds, uses the corporate car as her own, and uses the corporate credit card for personal purchases. Can a creditor of the corporation who has been unable to collect its claim from the corporation collect from either X or Y? -- State the general rule (about shareholders generally not liable for debts or acts of corporation), and -- State the PCV standard and -- Explain PCV. -- Then No PCV if the corporation has any mind, existence, or will of its own 23 2/4 BAR/BRI Bar Review New York Course CORPORATIONS very difficult to PCV in NY can pierce if … For example, a dummy corporation, where shareholders carry on business in personal capacity or for purely personal, not corporate, ends. Or a parent corporation so controls the daily operations of a subsidiary as to act as true prime movers behind the subsidiary=s action. Or a group of separate corporations are operated as one, so they are so dominated by one that they have no mind, existence, or will of their own. #124 If a court did PCV here, who would be liable X or Y or both? only X b/c he was only one treating the corp as his alter ego 2. Undercapitalization Liability S is a shareholder of Glowco, Inc., G, a corporation that hauls and disposes of nuclear waste. G does not carry insurance. G has an initial capitalization of $1,000. V is injured when one of G's trucks melts down. Can V sue S? #125 State the general rule and PCV standard and explain PCV. Here, the corporation was undercapitalized when formed. Why? undercapitalized when form – b/c "S/H failed to enough to cover prospective liabilities" and this is obvious on the facts #126 Is undercapitalization enough for PCV in New York? Apparently NOT also need illegality, fraud, OR excessive domination #127 As a general rule, do we expect PCV more readily in tort or contract cases? tort – much more readily C. Wages Liability #128 In a close corporation, the ten largest shareholders are personally liable for what? wages and benes to the corps EEs II. SHAREHOLDER MANAGEMENT OF CORPORATION A. Generally board of directors (not shareholders) who manage the corporation. There is a public policy that the Board must exercise the management power, and that shareholders should not encroach directly on that power. There is a trend away from that public policy in some instances. #129 B. Shareholders can manage the business directly in a close (or "closely held") corporation. What is a close corporation? 24 2/4 BAR/BRI Bar Review New York Course CORPORATIONS has few S/H and shares are not publicly traded most corps are close corporations How is power vested in the shareholders to manage a close corporation? A provision in the certificate can restrict or transfer Board power to shareholders or others. OK if: (1) all incorporators or shareholders (voting and nonvoting) approve it; (2) all subsequent shareholders have notice; (3) it is conspicuously noted on front and back of all shares; AND (4) shares are not listed on an exchange or regularly quoted over-the-counter. can do away w/ BOD entirely Liability #130 In a close corporation run by shareholders, who owes the duties of care and loyalty? managing S/H – those who are actually running the corp #131 In a close corporation, there is a trend toward imposing fiduciary duties on shareholders in their dealings with each other. Especially, controlling shareholders cannot use their power for Liability personal gain at the expense of minority shareholders or the corporation or to oppress minority shareholders or the corporation. They owe a duty of utmost good faith. Why might courts be increasingly willing to protect minority shareholders in a close corporation? b/c they have no way out (no public market for stock) C. Professional service corporations. Members of a licensed profession, like doctors and lawyers, cannot practice the profession through a general business corporation. But they can form a professional service corporation, usually abbreviated P.C. #132 Must shareholders in a P.C. be licensed professionals? YES – and so must officers and directors BUT – can hire non-professionals as EEs (BUT cannot render professional services) Liability #133 Are the professionals liable for their own malpractice? YES #134 Are the professionals liable for contracts entered by the entity and for rent due on leases in the P.C.' s name? NO In general, the P.C. is governed by rules of the business corporation. Certificate must meet the general corporation requirements except for the use of P.C. and must indicate the profession to be practiced and include the names and addresses of the original shareholders, directors, and officers. There must also be certification that each shareholder, director, and officer is licensed to practice the profession. O/W – just apply the general corporate rules #135 If one of the shareholders dies or is disqualified from the practice? 25 2/4 BAR/BRI Bar Review New York Course CORPORATIONS PC must purchase her shares III. SHAREHOLDER DERIVATIVE SUITS MBE – well tested A. In a derivative suit, a shareholder is suing to enforce the corporation's claim, not her own personal claim. It's a case in which the corporation is not pursuing its own claim, so a shareholder steps in to prosecute the claim. S/H as PL anytime see PL as S/H MUST determine if this is a derivative suit derivative suit b/c PL right to sue derives from the corporation #136 Always ask: could the corporation have brought this suit if Y is probably a derivative suit b/c vindicating the corporation's claim -- S, shareholder of C Corp., sues X for breaching its contract with C Corp. Derivative suit? YES -- because C Corp. could sue X for this breach. #137 -- S sues the board of directors of C Corp. for usurping corporate opportunities. Derivative suit? YES – breach of duty of loyalty which Corp can sue for remember – Duties are owed to the corporation So, breach hurts the corporation -- S sues board of directors of C Corp. for issuing new stock without honoring her preemptive rights. Derivative suit? NO -- this is a direct suit, for S's personal claim. this is not a suit defending the rights of the corporation #138 -- S sues to compel declaration of dividend. Derivative? Probably not. Maybe, though, if it could be arguably based upon a breach of duty to the corporation. arguably - might be derivative if part of mis-management BUT – probably not #139 -- S sues regarding waste of corporate assets. YES – derivative only B. Consequences of a successful derivative suit Generally, the recovery in any successful derivative suit goes to the corporation. makes sense b/c is the corporation's claim -- S, a shareholder of C Corp., sues X for breaching its contract with C Corp. The court finds a breach of contract and awards damages of $50,000. As a general rule, the corporation 26 2/4 BAR/BRI Bar Review New York Course CORPORATIONS receives the $50,000, because it is the corporation's claim. -- What does S receive? Costs and attorney's fees, usually from the judgment won for the corporation. After all, she conferred a benefit on the corporation by suing and winning. #140 -- We know the damages generally go to the corporation. But can S ever recover the damages directly in a derivative suit? MAYBE – if recovery to the corporation would return $$ to the bad guys -- A close corporation has three shareholders, each of whom owns one-third of the shares and participates in management. One breaches the duty of loyalty by engaging in a competing venture. In a derivative suit, the corporation wins a judgment to recover the bad guy's profits. But giving the recovery to the corporation will return one-third of it to the bad guy. Court might let the other shareholders recover directly, although it is a derivative suit. C. What are the consequences of an unsuccessful shareholders' derivative suit? #141 -- Can S still recover costs and expenses? NO #142 -- Is S liable to X for its costs? Probably, because the winner usually recovers costs from the loser (this is a basic Civil Procedure issue). But would S be liable to X for its attorney's fees? MAYBE – if S sued w/o reasonable cause #143 -- Can other shareholders later sue X on same transaction? NO D. What are the requirements for bringing a shareholder derivative suit? MBE - MEMORIZE – must know these EXCEPTION - D&O can sue on behalf of corp to compel an accounting for violation of duties in that suit, she does not have to meet the following requirements 1. Stock ownership #144 person bringing suit - must have owned stock (or held a voting trust certificate- question 158) at the time the claim arose or have gotten it by operation of law from someone who owned the stock when the claim arose. What are examples of operation of law? operation of law – inheritance + divorce decree In addition, she must own stock when the action is brought and through entry of judgment. 27 2/4 BAR/BRI Bar Review New York Course CORPORATIONS 2. Must adequately represent the interests of corporation and shareholders. must state this as a separate requirement – stock ownership alone does not meet this 3. Must also make a demand that directors bring suit UNLESS it would be futile. When might a demand be futile? If (1) majority of the board is interested or under the control of interested directors; or (2) the Board did not inform itself of the transaction to the extent reasonable under the circumstances; or (3) the transaction is so egregious on its face that it could not be the result of sound business judgment. #145 Special pleading requirement: PL must plead w/ particularity about efforts to get the corporation to sue OR why the demand is excused 4. Can be required to post security for costs UNLESS plaintiff owns 5% or more of any class of stock OR her stock is worth more than $50,000. court can require PL to post bond for litigation costs (which stops most of these actions) #146 5. If demand is made and refused, can S sue? ONLY if can show that majority of BOD is interested OR BOD procedure was incomplete or inadequate #147 Suppose S brings a derivative suit, and the corporation wants it dismissed. It can move to dismiss, based upon the finding by independent directors (or a committee of independent directors, sometimes called a special litigation committee) that the suit is not in the corporation=s best interests (e.g., low chance of recovery, or cost of suit will exceed recovery). What does the court look at in deciding whether to dismiss? first independence of those making the investigation and sufficiency of the investigation #148 In a derivative suit, the corporation must be joined as a party, but on what side? it is joined as a DEFENDANT – b/c it did not sue #149 Can the parties dismiss or settle a derivative suit? only w/ court approval court may notify S/H whose interests will be substantially affected by discontinuing the case IV. VOTING MBE – this stuff is occasionally tested very dry – easy to test + easy to grade 28 2/4 BAR/BRI Bar Review New York Course CORPORATIONS A. Who votes General rule is that record owner as of record date has the right to vote. 1. record owner is the person shown as the owner in the corporate records. The record date is a voter eligibility cut-off, set no fewer than 10 and no more than 60 days before the meeting. #150 C Corp. sets the annual meeting for July 7 and record date for June 6. S sells B her C Corp. stock on June 25. Who is entitled to vote the shares at the meeting, S or B? S – b/c she owned it on June 6 owner on record date gets to vote (even if no longer owns the stock on actual date of the vote) 2. Exceptions to the general rule that record owner or record date votes. a. Even if it is the record owner on the record date, corporation does not vote treasury stock. b. Death of shareholder. #151 S owns stock in C Corp.; S is the record shareholder. After the record date, S dies. Can S's executor vote the shares? YES - c. Proxies - A proxy is a 1) writing, 2) signed by record shareholder or authorized agent, 3) directed to secretary of corporation, 4) authorizing another to vote the shares. #152 Is a fax a writing for this purpose? YES – so is e-mail #153 On 2/2/2004, S sends letter to secretary of C Corp. authorizing Gomer Pyle to vote her shares. Can Gomer vote S's shares at the 2004 annual meeting in July, 2004? YES – this is a proxy AND this is OK in S/H voting (remember – no proxy in Dir voting) #154 Based on the same proxy, could Gomer vote S's shares at the 2005 annual meeting in July 2005? NO – proxy is good for 11 months UNLESS says otherwise #155 What if, prior to the 2004 meeting, S writes to the secretary of C Corp. that she now wants Don Zimmer to vote her shares at the 2004 meeting? OK – can revoke a prior proxy 29 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #156 Can S revoke her proxy even though it states that it is irrevocable? YES - #157 S sells B her shares after the record date but before the annual meeting. S gives B an irrevocable proxy to vote the shares at the annual meeting. Can S revoke this proxy? No, because 1) it says irrevocable and 2) the proxy-holder has some interest in the shares other than voting. What is this called? proxy coupled with an interest – it is irrevocable – this is an agency principle 3. Voting trusts and voting agreements. X, Y, and Z own relatively few shares of C Corp. They decide that they can increase their influence on corporate policy by Ablock voting,@ i.e., voting alike. a. Requirements for voting trust. (1) written trust agreement controlling how the shares will be voted; (2) copy to corporation; (3) transfer legal title of shares to voting trustee; and (4) original shareholders receive voting trust certificates and retain all shareholder rights except for voting. #158 Is there a time limit on voting trusts? YES – 10 year maximum (But within 6 months of expiration, can extend for another term of up to 10 years.) b. Requirements for voting agreement (or pooling agreement). #159 (1) Can shareholders enter into voting agreements? YES #160 (2) What is required? in writing + signed #161 (3) Are voting agreements specifically enforceable? apparently not #162 (4) What is special about a proxy given subject to a voting agreement? is irrevocable if it says so 30 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #163 Two shareholders agree to vote to elect each other as directors. That's OK, because electing directors is something shareholders do. But what if they then agree about what actions they will take once they are directors? MBE – note this question agreeing to Dir actions violates rule against voting agreements among directors BUT – would be OK if these are the only two S/H in the corporation who cares b/c they are mgmt anyway AND – is OK to agree to use your best efforts to cause the corporation to act in a particular way B. Where do shareholders vote? #164 1. What are the only two ways the shareholders can take a valid act? unanimous written consent signed by the holders of all voting shares a meeting BUT … If the certificate allows, can take action without meeting if there is agreement in writing of the holders of enough shares to pass a resolution if all voting shares were present and voting at a meeting. #165 2. Annual meeting (can be held anywhere): court can order one if not held. What is so important about the annual meeting? where S/H elect Dir 3. Special meeting (can be held anywhere). Who can call a special meeting of the shareholders? 1) board or 2) anyone provided in the certificate. A special meeting to elect directors must be called by the Board if there is a failure to elect a sufficient number of directors to conduct the business of the corporation. If the Board fails to call such a meeting, the holders of 10 percent of the voting shares may demand in writing that the corporation hold the meeting. In this case, the corporate secretary must give notice of the meeting. If the secretary fails to do so, the shareholders may give the notice. 4. Notice requirement - must give written notice to every shareholder entitled to vote, for every meeting (annual or special) between 10 and 60 days before the meeting. e-mail is OK #166 a. Contents of notice: MUST include … when & where the meeting will be Also must inform if the proposed action would entitle shareholders to appraisal rights and tell why (and even include the statute about appraisal rights). #167 And notice of a special meeting must state who called it and the purpose of the meeting. Why is the statement of purpose important? 31 2/4 BAR/BRI Bar Review New York Course CORPORATIONS b/c it limits what can be done at that meeting #168 Suppose a proper person calls a special meeting of the shareholders, and the stated purpose of the meeting is to remove a particular officer. MBE tested meeting must be for a proper S/H purpose this meeting is Bad b. Consequence of failure to give proper notice to all shareholders - action taken at the meeting is void UNLESS those not receiving notice waive the notice defect. How does waiver occur? Express: in writing and signed anytime; or Implied: if attend the meeting without objection. This is the same as for Directors C. How do shareholders vote? There must be a quorum represented at the meeting. Determination of a quorum focuses on the number of shares represented, NOT the number of shareholders. Generally, a quorum requires a majority of outstanding shares. #169 X Corp. has 120,000 shares outstanding. X Corp. has 700 shareholders. What's a quorum? 60,001 shares #170 Can the certificate or bylaws reduce a quorum to less than a majority? YES – but can NEVER be fewer than 1/3 of shares entitled to vote #171 Is it possible to require a supermajority (e.g., 90%) of the shares entitled to vote to be represented to constitute a quorum? YES – but it must be in certificate NOT in the by-laws #172 Is it possible to require a supermajority vote of the shares at the meeting to pass a resolution? YES – but it must be in certificate NOT in the by-laws If quorum is met, a majority may act to bind the corporation unless the certificate requires higher vote (can never set it at less than majority). Majority means majority of the shares actually voting in favor or against the proposal. (Abstentions don't count.) #173 X Corp. has 120,000 shares outstanding. 62,000 shares are represented at the meeting, but only 50,000 shares vote on a particular proposal. How many shares must vote for the proposal for it to be accepted by the shareholders? 25,001 #174 Once a quorum is established at a shareholders' meeting, can it be lost if people leave the 32 2/4 BAR/BRI Bar Review New York Course CORPORATIONS meeting? NO – this is different from the BOD D. How and when do shareholders use cumulative voting? not usually on Bar exam 1. Cumulative voting is only available in voting for directors. It is a device to help small shareholders get representation on the board. 2. How many votes do you have? Multiply number of shares times number of directors to be elected. #175 You own 1,000 shares of stock in C Corp. C Corp. has nine directorships open for election. You believe that Derek Jeter should be director of C Corp. Under cumulative voting, how many votes can you cast for Derek? have 9,000 votes key is casting all the votes in an at-large election where the top vote getters are elected #176 The certificate of C Corp. is silent as to whether shareholders can vote cumulatively. Can C's shareholders still vote cumulatively? NO – exists only if the certificate allows 3. If we just have to have a formula, here's one. Percentage of shares required to elect one director if cumulative voting is in place. You need one share more than this percentage: 100 (X is the number of directors being elected) X plus 1 #177 So if 9 directors are being elected, what would you need to elect one director? would need 10% + 1 share V. SALE OF STOCK BY SHAREHOLDER One nice thing about the corporation is free transferability of the ownership interest. You can give your stock away or, if you can find a buyer, you can sell it. A. Amount of consideration #178 S has 100 shares of $4 par, C Corp. stock. Can S sell her shares for less than $4 a share? YES – can sell shares for any amount B. Stock transfer restrictions can be in ANY of certificate + by-laws + an agreement b/w S/H and corporation 33 2/4 BAR/BRI Bar Review New York Course CORPORATIONS Kato is a shareholder of Famous For No Reason, Inc. His stock is subject to a stock transfer restriction that requires him to offer it first to the corporation. This is a right of first refusal. Kato sells the stock to the Paris Hilton in violation of the agreement. 1. Action against the selling shareholder look to the validity of the restriction Stock transfer restrictions will be upheld provided that they are reasonable under the circumstances, which means not an undue restraint on alienation. A right of first refusal is acceptable so long as the price offered is reasonable. For example, if the corporation offered to match Paris Hilton's offer. #179 Can the corporation require Kato to get its approval to sell his stock? PROBABLY NOT – b/c this would allow the corporation to refuse for no reason this is probably unreasonable SIMILAR – requiring unanimous approval of other S/H 2. Action against the buyer of the stock look for buyer's knowledge or notice Even if the restriction is reasonable and thus valid, it cannot be invoked against the transferee UNLESS either 1) it is conspicuously noted on the stock certificate or 2) the transferee had actual knowledge of the restriction. VI. RIGHT OF SHAREHOLDER (IN PERSON OR BY AGENT) TO INSPECT (AND COPY) THE BOOKS AND RECORDS OF THE CORPORATION remember – Dir have unfettered access #180 A. Statute gives a right to inspect and copy (1) minutes of shareholder proceedings and (2) the record of shareholders. Who can demand access to these? MBE – know this any shareholder on 5 days written demand B. The corporation can demand that the shareholder give an affidavit that his purpose is not other than in the interest of the corporation and he has not within 5 years tried to sell any list of shareholders. #181 Can the corporation demand more detail in the affidavit? NO – only what is in para B #182 What happens if the shareholder refuses to furnish such an affidavit after the corporation demands it? corporation may deny access C. A shareholder can make a written request for the corporation's latest annual balance sheet, profit and loss statement and latest interim statements distributed to shareholders or public. Corporation must provide the documents; can do so by mail. 34 2/4 BAR/BRI Bar Review New York Course CORPORATIONS D. A different statute gives a right to inspect and copy a list of the current directors and officers. Any shareholder can demand that on two day's written demand. #183 E. Common law right to inspect. For all shareholders, to inspect records at a reasonable time and proper place for a proper purpose (~ related to her role as a shareholder). What documents does this cover? unclear how broad this is – it may give broader access than statutory rights VII. DISTRIBUTIONS (payments to shareholders -- can be dividend or payment to repurchase shares or to redeem shares [forced sale to corporation at price set in certificate].) A. Distributions are declared in the Board's discretion. Thus, there is no shareholder right to a distribution UNTIL it is declared. (Once it's declared, shareholders affected have a right to it.) MBE – know this #184 Will a court interfere with the Board's discretion and order a distribution? MBE – only on a showing of bad faith or dishonest purpose -- Don't confuse a distribution with a stock split, which gives a shareholder more shares than she now has but reduces the value of each share proportionately. For example, say Sally owns 100 shares of Drew Carey Hairstyle Inc. The shares are selling at $40 per share. If the stock splits 2-for-1, Sally will end up with 200 shares, worth $20 per share. So the economic effect is nothing -- she has $4000 worth of stock either way. B. Which shareholders get dividends? For each hypo, the board of directors of C Corp. declares a dividend of $400,000. Who receives what if the outstanding stock is: #185 1. 100,000 shares of common stock? $4 / share #186 2. 100,000 shares of common and 20,000 shares of preferred with $2 dividend preference? Preferred means pay first. So those 20,000 preferred shares must be paid their $2 preference first, before anybody else gets anything. 20,000 shares multiplied by $2 equals a total preference of $40,000. So we skim off $40,000 and pay that to the preferred holders first. That leaves $360,000. Where does that $360,000 go? $3.60 / share to C/S #187 3. 100,000 shares of common and 20,000 shares of $2 preferred that is participating? Participating means pay again. So these 20,000 shares get paid twice -- once as preferred and again because they are participating. Do the preferred exactly as in hypo 2. 20,000 shares multiplied by $2 preference equals $40,000 (just like above). Pay that first, because it=s preferred (just like above). That leaves $360,000 (just like above.) 35 2/4 BAR/BRI Bar Review New York Course CORPORATIONS But here, the $360,000 gets divided by 120,000 shares. $3.00 / share to all C/S & PS $2.00 / share to PS #188 4. 100,000 shares of common and 20,000 shares of $2 preferred that is cumulative (and no dividends in the three prior years)? Cumulative means add them up -- for the years in which no dividend was paid, the cumulative holders' dividend is adding up. So the corporation owes these cumulative holders for the three prior years (because there have been no dividends over those years) PLUS there's this year, the year the dividend is declared. So the corporation owes the cumulative holders for four years of their $2 preference. $160,000 to P/S at $8 per P/S $2.40 to C/S (b/c PS is not participating) C. Which funds may be used for any distribution (dividend, repurchase, redemption)? more likely for testing 1. Surplus #189 a. How is surplus computed? assets – liabilities – state capital net assets – stated capital #190 b. Can surplus be used for distributions? YES 2. Stated capital #191 a. Can stated capital be used for distributions? NO - never b. How is stated capital computed? C Corp. has issued 10,000 shares of $2 par stock for $50,000 and 4,000 shares of no par stock for $70,000. #192 ON PAR STOCK: $20,000 goes to stated capital and $30,000 goes to surplus. Why? stated capital – is the par value of a par issuance ON THE NO-PAR STOCK: Within 60 days after issuance, the Board can allocate any part, but not all, to surplus. If the Board does not do this, it is all stated capital. $70,000 if BOD does nothing #193 D. Corporation can make distributions even though it lost money last year; corporation 36 2/4 BAR/BRI Bar Review New York Course CORPORATIONS cannot make distributions if it is insolvent or if the distribution would render it insolvent. What does insolvent mean? insolvent ~ unable to pay debts as they come due in the course of business e.g., distribution followed by corp subsequently not being able to meet obligations #194 E. Directors are personally liable for unlawful distributions, as are shareholders who knew the distribution was unlawful when they received it. Remember, however, directors' possible defense of good faith reliance. Cross-reference question 108. F. Redemptions are set in certificate, and must be done proportionately within each class of stock. Repurchases are individually negotiated, and can discriminate except in close corporation, where must give equal opportunity to all shareholders. cross reference question 131 watch out for oppression of minority S/H – court will jump in if there is no public market to allow minority S/H an out FACT PATTERN 5: FUNDAMENTAL CORPORATE CHANGES I. CHARACTERISTICS OF FUNDAMENTAL CORPORATE CHANGE A. These are so fundamental that, most of them require both that the directors approve and that the shareholders approve. In addition, in most, the corporation must notify the Department of State by delivering a document which the Department files. B. The dissenting shareholders' right of appraisal - is the right of a shareholder to force the corporation to buy her shares at fair value. 1. When will a shareholder have a dissenting shareholder right of appraisal? a. What actions by corporation trigger the shareholder's right of appraisal? (1) some amendments to the certificate (see below); (2) consolidation; (3) your corporation merges into another corporation; (4) your corporation transfers substantially all of its assets; OR (5) your corporation's shares are acquired in a share exchange. #195 BUT even if the corporation is doing one of these things, there is no right of appraisal if the company is listed on a national securities exchange or NASDAQ. Why does this rule make good sense? b/c people can get the same remedy (FMV) through the public market mechanism (which is more efficient) (In our hypos, we will assume that the stock is not listed on an exchange.) b. What actions are taken by shareholder to perfect the right? (1) Before shareholder vote, file written notice of objection and intent to demand payment; 37 2/4 BAR/BRI Bar Review New York Course CORPORATIONS (2) Abstain or vote against the proposed change; and (3) After the vote, make written demand to be bought out. 2. If the shareholder and the corporation cannot agree on fair value, the corporation sues and the court determines the value. #196 In setting the value of the stock, can the court discount the value to reflect the fact that minority shares may be worth less than controlling shares, because they carry no control over corporate affairs? NO – no minority discount in NY – NY has rejected this in the appraisal right (they get the FMV of the stock) II. AMENDMENT TO THE CERTIFICATE OF INCORPORATION A. Minor changes, such as those relating to office location, registered agent, etc. are made by BOD B. Other amendments, such as change of name, purpose or duration, increase or decrease of shares or par, creation of new classes of stock, denial or grant or limitation of preemptive rights, must be approved by director action AND by a majority of the shares entitled to vote. #197 The directors approve an amendment and recommend it to the shareholders. If there are 4,000 outstanding shares entitled to vote, how many must vote for the amendment? 2,001 #198 Same facts, but suppose only 2,400 shares attend the meeting to vote on the amendment, and only 2,200 shares actually vote. How many must vote in favor of the amendment for it to pass? still need 2,001 – still need majority of shares entitled to vote #199 For these types of amendments, does it matter when the corporation was formed? NO C. Amendments to change or strike a supermajority quorum or voting requirements or to strike a provision restricting board authority Board approval? Any such amendment requires director approval. Shareholder approval? The situation is goofy. If the amendment will change or strike a supermajority quorum or voting requirement for board of director voting or will strike a provision restricting board authority, in addition to board approval, we need: #200 -- For corporations formed on or before February 22, 1998: Must get Board approval and approval by 2/3 of the shares entitled to vote 38 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #201 -- For corporations formed after February 22, 1998: Must get Board approval and approval by a majority of shares entitled to vote #202 BUT if the amendment will change or strike a supermajority quorum or voting requirement for shareholder (not director) voting, in addition to director approval, the amendment must be approved by 2/3 of the shares entitled to vote. Does it matter here when the corporation was formed? NO – they did not change this D. If an amendment is approved, deliver certificate of amendment to Department of State for its filing. E. Are there dissenting shareholder rights of appraisal? Yes, if the amendment alters or abolishes a preference, changes redemption rights, alters or abolishes a preemptive right or limits voting rights. III. MERGERS [B merges into A] OR CONSOLIDATIONS [A and B form C] A. Each company's board of directors adopts a plan of merger (or consolidation) and B. Shareholder approval – required from each corporation A Corp. has 6,000 outstanding shares entitled to vote. How many shares must vote for the proposed merger of A Corp. with B, Inc.? #203 -- For corporations formed on or before February 22, 1998: at least 2/3 of shares entitled to vote ~ 4,000 shs #204 -- For corporations formed after February 22, 1998: a simple majority ~ 3,001 shs C. No shareholder approval required in short-form merger, where a parent corporation owns 90 percent-or-more of each class of stock of a subsidiary that is merged into a parent corporation. D. Deliver certificate of merger (or consolidation) to Department of State for filing. #205 E. Are there dissenting shareholders' rights of appraisal? YES – but ONLY for S/H of the corp that disappears #206 -- What about for shareholders of the subsidiary in a short-form merger? 39 2/4 BAR/BRI Bar Review New York Course CORPORATIONS YES – have the right of appraisal even though they DID NOT VOTE F. Effect of merger or consolidation: the surviving company succeeds to all rights and liabilities of the constituent companies, which have disappeared. survivor liability applies IV. TRANSFER (not just mortgage) OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS NOT IN THE ORDINARY COURSE OF BUSINESS OR SHARE EXCHANGE (one company acquires all the outstanding shares of one or more classes of another corporation) These are fundamental corporate changes for the selling corporation only. Not for the buying corporation S Corp. wants to sell all of its assets to B, Inc., or B, Inc. wants to acquire all the shares of S Corp. A. Each corporation's board of directors authorizes the deal and B. Approval by selling corporation's shareholders 1. Number of shares of S Corp. (seller) that must approve the sale? #207 For corporations formed on or before February 22, 1998: 2/3 of shares entitled to vote #208 For corporations formed after February 22, 1998: majority of shares entitled to vote #209 2. Number of shares of B, Inc. (buyer) that must approve the sale? they do not vote – it is NOT a fundamental corporate change for the buyer C. In the share exchange, deliver plan of exchange with the Department of State for filing. In the transfer of assets, no such filing is required. D. Are there dissenting shareholders' rights of appraisal? Yes, for shareholders of the selling corporation only. Not for the shareholders of the buying corporation (because it is not a fundamental corporate change for the buyer). -- Exception: no right of appraisal even for shareholders of selling corporation if a sale of assets is for cash and the company will dissolve and distribute cash to shareholders within one year. Such a corporation is essentially dissolving. MBE - picky – but has been tested recently corp is essentially dissolving anyway <> make sense to give S/H right of appraisal anyway 40 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #210 E. General rule, the acquiring company will not be liable for the torts of the company whose assets it acquired unless (1) the deal provides otherwise, or (2) the purchasing company is mere continuation of the seller, or (3) the deal was entered fraudulently to escape such obligations. Is this different from the merger? differs from merger b/c no successor liability here (where seller stays in existence) in a merger the seller disappears transfer of assets the seller is still in existence sue them V. DISSOLUTION MBE – very popular A. Voluntary -- no Board vote necessary. What shareholder vote required? #211 -- For corporations formed on or before February 22, 1998: 2/3 of shares entitled to vote #212 -- For corporations formed after February 22, 1998: majority of shares entitled to vote Mnemonic – If George Washington were alive today he would be really OLD Either way, certificate of dissolution delivered to the Department of State for its filing. B. Involuntary (judicial someone is asking for a court order of dissolution). 1. By Board resolution OR resolution of majority of shares entitled to vote, stating that (A) corporation has insufficient assets to discharge liabilities OR (B) that dissolution would be beneficial to shareholders. 2. One-half or more of shares entitled to vote may petition if directors too divided to manage or shareholders too divided to elect directors or magnitude of internal dissention makes dissolution beneficial to shareholders. 3. Any shareholder entitled to vote may petition if shareholders unable to elect directors for two annual meetings. 4. Twenty percent or more of voting shares in corporation whose shares are not traded on a securities market may petition on either of these grounds: MBE – ALWAYS tested a. Management's illegal, oppressive or fraudulent acts toward complaining shareholders or b. Management=s wasting, diverting, or looting assets. 41 2/4 BAR/BRI Bar Review New York Course CORPORATIONS #213 Who is management here? c/b either Dir or managing S/H – b/c this is a close corporation c. Court may deny dissolution if there is some other way the complaining shareholder can obtain a fair return on his investment, e.g., by ordering buy out. Court will consider whether liquidation is necessary to protect the petitioners and is the only way for them to get a fair return on their investment. #214 How may the corporation or non-complaining shareholders try to avoid dissolution here? w/i 90 days of the petition for involuntary dissolution buy the petitioner's shares at FMV on terms approved by the court #215 C. Winding up (liquidating): 4 steps 1) gather all assets, 2) convert to cash, 3) pay creditors, and 4) distribute remainder to shareholders, pro-rata by share unless there's a dissolution preference. dissolution preference – means pay first will ALWAYS be specified in the certificate's discussion of what the preference is on the PS FACT PATTERN 6: CONTROLLING SHAREHOLDERS I. TRADITIONAL RULE Outside the close corporation, shareholders generally do not owe fiduciary duties to each other or to the corporation. They can act in their own self-interest. II. BUT … CONTROLLING SHAREHOLDER #216 A. Owes a Duty. A shareholder who also occupies a control position (such as a director position) OR whose ownership is such that she has working control over the corporation owes a fiduciary duty (of utmost G/F) to minority shareholders and, sometimes, to others (including the corporation). She cannot use a dominant position for individual advantage at the expense of minority shareholders or the corporation. Where is such a problem most likely? Liability usually in a close corporation where controlling S/H oppresses minority S/H duty ~ of utmost G/F breach of duty controlling S/H is liable to minority S/H B. Sale of Controlling Shareholder's Interest #217 Because of her control, the shareholder may be able to sell her shares at a premium. If she does, can she keep the money? generally YES no case imposes liability from the controlling S/H to the minority S/H But courts may impose liability in this situation IF something else happened too. 42 2/4 BAR/BRI Bar Review New York Course CORPORATIONS (1) Controlling shareholder sold to looters without making a reasonable investigation. What kind of facts are most likely here? Watch for facts that would put a reasonable person on notice of a problem, e.g., agent approaches controlling shareholder on behalf of an undisclosed principal. controlling S/H has duty to investigate #218 What happens if the controlling shareholder sells without reasonable investigation to somebody who then loots the corporation? Liability disgorge seller's profit + may be liable for all damage done to the corporation #219 (2) Controlling shareholder de facto sells a corporate asset. If she does, all shareholders should share in the premium paid by the buyer. here – buyer buys the corp not to buy the stock BUT to obtain a corporate crown Liability jewel very easy to raise this w/ corporate looting (3) Controlling shareholder sells a corporate office, e.g., a position on the Board. Fiduciaries Liability cannot sell their position. E.g., controlling shareholder sells controlling interest and agrees that she and Aher@ directors will resign from the board. It is one thing to have the new controlling shareholder elect new directors. It is another, though, to sell seats on the board. Disgorge the profit. very easy to raise w/ 218 & 219 #220 C. Freeze-out mergers. All mergers must have a legitimate corporate purpose, even though approved by the requisite number of shares. Watch for freeze-out merger aimed solely at Liability cashing out minority shareholders unfairly. Usually, majority shareholders cause their corporation to merge with another corporation which they own. The minority shareholders' shares are purchased for cash, so they have no interest in either corporation. Courts may be increasingly protective of minority. What will the court probably look at in such a fact pattern? court looks at the transaction as a whole … fairness of the terms AND fairness of the treatment of the minority shareholders Factors: (1) whether the deal is tainted by self-dealing or fraud; (2) whether the minority shareholders are dealt with fairly; (3) whether there is a legitimate business reason for the merger. #221 D. Market trading on inside information. Suppose a director of officer engages in market trading based upon inside information from the corporation. She makes a profit by doing so. Liability In New York, the director or officer has breached a duty to the corporation by doing this. So what can happen? corp can sue to recover the profit she made form market trading this is the corp's COA BUT c/b subject of a derivative suit consider the federal issues that might also apply E. Nondisclosure of "special facts" (or special circumstances). All directors and officers Liability 43 2/4 BAR/BRI Bar Review New York Course CORPORATIONS (and probably controlling shareholders) owe an affirmative duty to disclose special facts in a securities transaction with a non-insider. So they cannot trade on secrets; they must disclose or abstain from dealing. this is a C/L insider trading issue 1. special facts - Those a reasonable investor would consider important in making an investment decision. They bear on potential value of the securities. 2. Who can sue - A shareholder with whom the director or officer deals and violates the special facts doctrine. 3. Measure of damage: difference between price paid and value of stock a reasonable time after public disclosure (once market has time to digest). David is a director of X Corp., and has just learned that the company has developed a new machine that will revolutionize the market. The company's stock is now selling at $10 per share. Reports indicate that the stock will go to $50 per share within weeks of the announcement of the new machine. Bobbitt, a shareholder, calls David to complain about the company, and says he wishes he'd never bought stock. David offers to take the stock off Bobbitt's hands for $20 per share. Bobbitt sells. After the announcement, the stock goes up to $50. Can Bobbitt sue David? This is not common law fraud, since David made no affirmative misrepresentation. (If he had, Bobbitt could sue him for fraud.) But can Bobbitt sue David under the special facts doctrine? #222 1. The information is clearly a special fact. Why? b/c a reasonable investor would consider it important 2. Bobbitt is a shareholder, who does not know the inside information. David is a director, who has inside information. David traded on that inside info without disclosing it. He thereby breached a duty to Bobbitt. b/c had a duty to disclose #223 3. What damages can Bobbitt recover from David? $30 / share difference b/w $20 per share and $50 which is what the stock was worth after news became public #224 LAST POINT: If you have questions, call me. E-mail is not a good option for me. Call and if I=m not there, leave a message and I=ll call you back. My phone number is: 404–727-6838 44 2/4


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DentAcetic Wipes (Canada)
This page contains information on DentAcetic Wipes for veterinary use.The information provided typically includes the following:
- DentAcetic Wipes Indications
- Warnings and cautions for DentAcetic Wipes
- Direction and dosage information for DentAcetic Wipes
Dentacetic Wipes
This treatment applies to the following species:For Dogs & Cats
1% Acetic Acid and Sodium hexametaphosphateDirections
Once daily. Remove wipe and rub against teeth and/or gums.Precautions
If undue irritation occurs, discontinue and consult veterinarian. Avoid contact with eyes.Us Patent #6,610,276b2
25 Wipes
Nac No.
11670014Distributed by AVENTIX ANIMAL HEALTH CORP.
Telephone: | 905-332-4744 | |
Toll-Free: | 877-909-2242 | |
Fax: | 905-332-4844 | |
Website: | www.aventix.ca | |
Email: | email@example.com |
Every effort has been made to ensure the accuracy of the DentAcetic Wipes information published above. However, it remains the responsibility of the readers to familiarize themselves with the product information contained on the Canadian product label or package insert. |
Copyright © 2015 North American Compendiums. Updated: 2014-12-03

subset: commoncrawl


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boston - Page 12
Man In Burned Remains Case Held On Other Charges
Napoli Agrees to 2-Year Deal with Red Sox
Mass. Poplulation To Increase Slightly Over Next 20 Years
492 People Died in Boston's Coconut Grove Fire 71 Years Ago
Bill Maher Insults Boston Marathon Bombing
The liberal HBO "Real Time" talk show host, Bill Maher, has outraged many with his recent cheap shot and put-down of the Boston Marathon bombing. "You know, it was, again, a bad day. Three people died, that's terrible, more were maimed, that's horrible, but unfortunately, that happens every day in car accidents and everything else
Will Mitt Romney Bring the Olympics to Boston?
Back Bay Parking Spot Up For Auction
Red Sox Pitcher Jake Peavy Buys a Duck Boat
Dartmouth Group Gets Few Answers From DEP
A busload of Southcoast residents went to Boston on Tuesday, hoping to convince D-E-P officials to do more testing at the Smith-Robinson Landfill in Dartmouth.
The D-E-P wants to move forward with a plan to cap the privately-owned landfill, with slightly contaminated soil from the Boston area.


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CHARLESTON, W.Va. – Officials with West Virginia American Water Company say all of the carbon filters at the Kanawha Valley Water Treatment Plant have now been fully replaced.
According to company officials, tests of the water from those filters have shown no trace amounts of MCHM — the coal processing chemical that spilled into the Elk River on Jan. 9 and contaminated tap water in parts of nine counties.
The last of the test results were returned on Thursday.
Work to replace the filters started in April.
Since then, nearly one million pounds of activated carbon from 16 total filters has been removed and replaced with new carbon. WVAWC officials said the water has been tested to ensure it meets all drinking water standards.
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The Chedi
Quick destination search |
The Chedi
Adult from: £1,075 Child from: Please call for details
A stylish, boutique desert oasis, The Chedi epitomises the beauty and simplicity of its setting between the mountains and the sea. Traditional Omani architecture adds an aura of timelessness.
Against a mountain backdrop, the low-level Chedi occupies a spacious estate with its own stunning beach about 15 minutes drive from the airport
Hotel facilities
Gym, Restaurant(s), Spa, Swimming Pools
Room facilities
Air Conditioning, Mini Bar, Room Service, Shower, Telephone, Television


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A former Navy pilot, Bob Lally moved to Colorado Springs in 2006 for a job with U.S. Northern Command. The "wow factor" of the city captured his attention, so he dropped anchor and waded into the community. Today, Lally's involved with the National Homeland Defense Foundation and the UCCS athletic foundation. But he might be… Continue Reading Lally leading the conversation about Memorial's future
Continue reading …David Loose has been Junior Achievement of Southern Colorado's CEO since 2008, but he has been with the organization for nearly three decades. During his 14-year tenure with J.A. International, Loose traveled to nearly 60 countries, expanding J.A.'s outreach from 15 nations to 97, increasing the number of students reached from 50,000 to more than… Continue Reading David Loose works to 'create the future' at JA
Continue reading …Daisy McConnell is the new co-director of the UCCS Gallery of Contemporary Art. GOCA is a nonprofit art center and school. It offers visual art exhibitions from emerging and mid-career artists from its two galleries, one downtown at 121 S. Tejon St. and one on the UCCS campus, 1420 Austin Bluffs Parkway.The downtown gallery opened… Continue Reading McConnell: Ready to serve 'culture with cocktails'
Continue reading …Eric Austin Attard has been the executive director of the Pikes Peak Gay & Lesbian Community Center since May. He's also busy working on a master's in marriage and family counseling. The Springs has a reputation for being intolerant. What's your take? I think where you immerse yourself is vital to that question. A lot… Continue Reading Attard: Working to build cohesion amid diversity
Continue reading …Jackie Driscoll's newly created position at Centura Health, the parent of Penrose-St. Francis Health Services and about a dozen other hospitals in Colorado, grew out of the system's plans to deal with health care reforms. Driscoll, a native of Colorado Springs, started her career as a medical technologist and now serves as the chief business… Continue Reading Driscoll pushing personal accountability to keep costs down
Continue reading …Greccio Housing Development Director Jill Gaebler is the board president of the Colorado Springs Charter Academy, now one of the city's most successful charter schools, which she helped found several years ago. She's an Air Force veteran, a mother of two and a swift marathoner. How did you decide to start a Charter School? Back… Continue Reading Gaebler's success lies in scripting of school
Continue reading …The 2011 U.S. Women's Open is still a year away but Doug Habgood is already busy getting things ready. Habgood, the head of the Bruno Events team for the Open, knows how much work is involved. "You've got to remain cool and calm, even when everything is crazy," he said. Apparently, Habgood's good at the… Continue Reading Open organizer has 150,000 reasons to pull his hair
Continue reading …Richard Nehring has spent 27 years tracking oil and gas deposits in the United States. The founder of Colorado Springs-based NRG Associates, Nehring says that, despite the Gulf oil spill, oil companies will seek to tap reserves in deeper waters and in more remote areas. And as that occurs, the nation will have to make… Continue Reading Local oilman offers insight on spill, cleanup and future
Continue reading …The Western Museum of Mining and Industry is one of the few privately funded history museums in the nation. David Carroll, who has a master's in arts administration, has been executive director since 2005. Under his leadership, revenue has increased 86 percent and total visitation increased 27 percent. What's new at the museum? Most people… Continue Reading Mining museum chief emphasizes mix of art, heritage
Continue reading …Denver native Chuck Fowler has lived in Colorado Springs for many years and now runs CFowler Communications. He has been married to Cindy (who received the Chamber's Athena award earlier this year) for more than two decades, and the couple has one daughter, Emily. Recently, Fowler volunteered his time to head the "City Committee," which… Continue Reading Fowler: Offering advice to the city, free of charge
Continue reading …


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X Starship Traders is a GTK+-based X Windows client for the online Web game, Starship Traders.
Tags | Games/Entertainment mud Real Time Strategy Role-Playing |
Licenses | GPL |
Operating Systems | POSIX Linux Solaris |
Implementation | C |
Release Notes: This release adds a radio dialog window. You can use this window to send radio messages to other players in the game. It also displays any radio messages and all news items in a scrolling text window.
Release Notes: Some layout changes, a fix for a bug in the boss key, changing the input box to work only as a radio, a new Menu item (help->Game Help; It is only active when the client is connected), and turning off the preferences and macro menus as they are not working exactly right in the current version.
No changes have been submitted for this release.


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04/01/14 - After Collinsville scored five fifth-inning runs to grab a 5-3 lead, the Panthers responded with six in their half of the inning and defeated the Kahoks 9-5
06/01/14 -
04/02/14 -
12/03/13 - Follow live Panther baseball by subscribing to GameChanger. Click the headline for more info.
03/31/14 - It didn't take long for the OTHS baseball team to get into the swing of things. In their first week of diamond action, the Panthers resembled a wrecking crew, blasting out basehits and producing runs in bunches on their way to a 3-0 start.


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What does WAHV stand for?
What does WAHV mean? This page is about the various possible meanings of the acronym, abbreviation, shorthand or slang term: WAHV.
We've found a total of 3 definitions for WAHV:
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WAHV | Women Artists of the Hudson Valley | ||||
WAHV | S. S. Maersk Missouri ship's radio | ||||
WAHV | former FM-103.9, Owosso, Michigan (now WRSR-FM) |
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"WAHV." Abbreviations.com. STANDS4 LLC, 2015. Web. 1 Mar. 2015. <http://www.abbreviations.com/WAHV>.


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For now, Air Force underclassmen relegated to supporting roles
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Posttraumatic Stress Disorder Checklist (PCL)
Posttraumatic Stress Disorder Checklist (PCL)
Summary |
This 17-item self-report scale for PTSD is based on DSM-IV criteria and takes 5-7 mins to complete. There are slightly different versions for use with military (M) or civilian (C) populations, as well as a version focused on a "specific stressful experience" (S). |
Author/publisher details |
National Center for PTSD, Boston, USA. |
Date |
1993 |
Description |
The PCL is a 17-item self-report checklist of PTSD
symptoms based closely on the DSM-IV criteria. Three versions of the PCL are available, although the differences are slight. The PCL-M is a military version and questions refer to "a stressful military experience". The PCL-C is a general civilian version that is not linked to a specific event; the questions refer to "a stressful experience from the past". The PCL-S can be referenced to any specific traumatic event; participants are asked to nominate the event and questions refer to "the stressful experience". Scoring is the same for all three versions. Versions of the PCL are also available in Bosnian, Chinese and Spanish (see below). |
Scoring and Psychometrics |
Scoring Psychometrics The PCL correlates positively with the Mississippi PTSD Scale with convergent validity of between r = .85 and .93 (Weathers et al, 1993). Strong correlations have also been reported with MMPI-2 Keane PTSD Scale (.77), IES (.77-.90) and CAPS .92 (Blanchard et. al., 1996) A cutoff score of 50 for a PTSD diagnosis has demonstrated good sensitivity (.78 to .82) and specificity (.83 to .86). Lowering the cutoff score to 44 revealed better sensitivity (.94), specificity (.86) and overall diagnostic efficiency (.90) with MVA victims (Blanchard et. al., 1996). |
Non-English Translations |
Bosnian (Charney et al,
unpublished) Chinese (Wu et.al In Press) Spanish (Marshall, 2004; Orlando & Marshall,
2002) |
Key/core References |
Blanchard, E. B., Jones Alexander, J., Buckley, T. C., & Forneris, C. A. (1996). Psychometric properties of the PTSD Checklist (PCL). Behaviour Research and Therapy, 34, 669-673. Forbes, D., Creamer, M., & Biddle, D. (2001). The validity of the PTSD checklist as a measure of symptomatic change in combat-related PTSD. Behaviour Research & Therapy, 39, 977-986. Ruggiero, K. J., Del Ben, K., Scotti, J. R., & Rabalais, A. E. (2003). Psychometric Properties of the PTSD Checklist--Civilian Version. Journal of Traumatic Stress, 16, 495-502. Weathers, F. W., Litz, B. T., Herman, D. S., Huska, J. A., & Keane, T. M. (1993). The PTSD Checklist (PCL): Reliability, validity, and diagnostic utility. Paper presented at the 9th Annual Conference of the ISTSS, San Antonio, TX. Translations Bosnian Chinese Spanish Marshall, G. N. (2004). Posttraumatic stress disorder symptom checklist: Factor structure and English-Spanish measurement invariance. Journal of Traumatic Stress, 17(3), 223-23 Orlando, M., & Marshall, G. N. (2002). Differential item functioning in a Spanish translation of the PTSD checklist: detection and evaluation of impact. Psychological Assessment, 14(1), 50-59. |
Information |
Additional information has been compiled on the
Measurement Experts site: http://www.ncptsd.va.gov/ncmain/ncdocs/ |
View manual |
No manual exists for the PCL; it is used in the same way as other self report scales and is self explanatory. For advice on interpretation, see above and refer to key references. |
View tool |
This resource should be used in an ethical and responsible manner and should be used only for the purpose(s) for which it has demonstrable validity. Please observe copyright where indicated and reference it appropriately. English language versions Other Languages: |