Which of the following documents can shareholders inspect under the MBCA?

Sawyer is a U.S. Senator on the Senate Committee on Foreign Relations.  As a result of Sawyer’s position, he learns that several oil-producing countries are about to cut production of oil in order to increase the price of oil.  (The Committee was evaluating whether such an action would de-stabilize any U.S. interests in the region.)  Sawyer also recognizes that, as the price of oil rises, oil companies will profit from the price increase, including Big Oil Inc. (“BOI”).  Sawyer is not an officer, director or shareholder in BOI when he learns this information, but he buys stock in BOI before the information is announced publicly.  Once the information is announced, BOI’s stock skyrockets, and Sawyer makes a lot of money.  If, based upon these facts, Sawyer is prosecuted for insider trading, is Sawyer likely to lose or to prevail?

Anthony, Greg, Jeff, Murray and Dorothy form a closely held corporation called Wiggles, Inc.  Each individual has 20% of the stock.  Anthony, Greg and Jeff enter into an agreement to vote their shares in order to elect each other as directors of Wiggles, Inc. for a period of 6 years.  For the first 4 years of the agreement, Anthony, Greg and Jeff vote to elect Anthony, president, Greg, Chief Financial Officer, and Jeff, Secretary, However, after 4 years, Dorothy is running against Anthony for President of the corporation, and Jeff decides to vote for Dorothy.  Because of Jeff’s vote, Dorothy wins.  Anthony and Greg are furious and sue Jeff to force him to resign as a director. Who wins?

Alvin is the President of AZ Products, Inc. (“AZ”), a corporation whose stock is publicly traded.  Morgan is an AZ shareholder.  One evening Morgan runs into Alvin at a party. Alvin knows Morgan is an AZ shareholder.  Alvin, who has had too much to drink, tells Morgan that if she will drive him home safely, he will give her confidential information about the company.  Morgan drives Alvin home and at the end of the ride, Alvin says, “Thanks for the ride.  As promised, I am telling you that AZ is about to announce a huge breakthrough in our research.  Do not sell your stock.”  Morgan, who was thinking about selling her stock in AZ determines not to do so, based upon this information from Alvin.  When AZ makes its big announcement, the AZ stock soars, and Morgan’s AZ shares are worth $100,000 more than they would have been had she sold them as she had originally intended.  Would Morgan face potential liability under Rule 10b-5?

Ariella is the controlling shareholder of a corporation that owns a significant subsidiary, SubCo. She frequently directs SubCo to pay large dividends to the parent corporation, Ariella Corp., which owns 95% of SubCo’s shares. SubCo’s minority shareholders are concerned that these dividend payments are detrimental to their interests. In a legal dispute, what standard of review will likely apply to Ariella’s actions regarding the dividend payments?

Zach and Lisa have formed an LLC under Delaware law. Mark wants to join the LLC as a member. However, he does not want to make a contribution to the LLC and is not interested in receiving a limited liability company interest. Assuming that Lisa and Zach agree with Mark’s demands, would it be legally possible for Mark to become a member without a membership interest and without making a contribution?

Which of the following is NOT one of the three minimum required committees for public companies?

Charlie and Dana are members of GreenTech LLC, which was established with an operating agreement that grants each member equal voting rights and stipulates that any dissolution of the LLC requires the approval of at least 75% of the members. Charlie wants to dissolve GreenTech LLC, but Dana opposes this decision and refuses to vote in favor of dissolution.Which of the following statements is most accurate based on the operating agreement’s provisions?

Wood is a senior vice president of Soda Sales Corp., a Delaware corporation (“SSC”).  Wood is offered the opportunity to buy a new soda recipe for SSC from Ivan Inventor. Wood does buy the recipe for SSC, but, unfortunately, the recipe is a flop, and SSC loses $2 million on the transaction.  N. Gree, an SSC shareholder learns of Wood’s actions and is upset.  N. Gree wants to sue and allege that Wood was negligent in purchasing the recipe.  What type of action would be most likely to succeed?

Pauline owns and operates the Sweet Dreams candy store on Main Street, where Abe works as a part-time employee.  When Abe gets to work one day.  Abe sees a Sweet Dreams’ customer, Tom, whom, Abe believes has stolen a chocolate bar from Sweet Dreams.  Although Sweet Dreams instructs everyone who works in the store to never use any force whatsoever with any customer, Abe follows Tom out of the store, pushes him to the ground and searches Tom’s pockets.  It turns out that Tom has a cell phone case that looks like a candy bar, and Tom had not taken anything from Sweet Dreams.  Abe apologizes, but Tom says, “You are out of control; you injured my wrist when you pushed me down, and I am going to sue you and this store.”  Assuming Tom has a claim against Abe, is it likely that he can extend that claim to hold Sweet Dreams and Pauline vicariously liable for Abe’s actions?