Which of the Following Requirements Must Be Met for a Redemption

question 14

Multiple Choice

Which of the following requirements must be met for a redemption to be treated as substantially disproportionate?

• A) The shareholder must own less than 50% of the outstanding stock (in terms of voting power) after the redemption.
• B) After the redemption, the shareholder must own less than 80% of his percentage ownership of common stock (voting and nonvoting) prior to the redemption.
• C) After the redemption, the shareholder must own less than 80% of his percentage ownership of voting stock prior to the redemption.
• D) All of the above must be met.

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Definitions:

Civil Liability

involves a legal obligation that arises in civil lawsuits as opposed to criminal proceedings, where an individual is held responsible for damages or injuries caused to another party.

Tort of Nuisance

A legal action for damages caused by a person's unreasonable use of their property, which interferes with others' rights to enjoy their property.

Trespassory Invasion

An unauthorized entry onto the property of another person, resulting in an infringement of that person's right to exclusive possession.

False Light

A concept in privacy law where an individual is publicly misrepresented in a way that could be damaging to their reputation, even if not defamatory.