A Ron Wants to Buy All of the Stock of Quagmar

question 29

Essay

a. Ron wants to buy all of the stock of Quagmar, Inc. He approaches the officers and directors and offers to pay them $200 per share for each of the shares they hold. The officers and directors agree and then convince the majority of shareholders to sell their stock for $100 per share. Do the other stockholders have a cause of action against the officers and directors? Explain.
b. Arthur, Bob, and Clark are three of the five board members of Krescent, Inc. One day they meet by chance for breakfast and decide to transact some corporate business while they are all together. If they decide to declare a dividend and to purchase another building for the corporation at this meeting, will their actions be binding on the corporation? Explain.

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Definitions:

Behavioral Assessment

The process of observing, measuring, and documenting a person's behavior to understand and address psychological issues.

Cognitive Appraisal

A mental process wherein an individual evaluates and interprets an event or situation, influencing their emotional response.

Genetically Influenced

Traits or behaviors that are affected by genes inherited from one's parents.

Unconscious Conflicts

Deep-seated inner dilemmas that reside outside conscious awareness, often originating from childhood experiences and influencing behavior and emotions.