Final Review Blaw 3312 -001
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BLAW 3310 - 001
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This 5 page Study Guide was uploaded by loveena Cherukunnathu on Tuesday December 8, 2015. The Study Guide belongs to Blaw 3312 -001 at University of Texas at Arlington taught by John D Dowdy in Summer 2015. Since its upload, it has received 207 views. For similar materials see Law II in Business at University of Texas at Arlington.
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Date Created: 12/08/15
Final Review of questions in exams Bankruptcy 26 Securities Regulation 11 Antitrust 13 The ABC Corporation filed a Chapter 11 petition in the Federal Bankruptcy Court on June 1 2009 In the process of disclosing the names of creditors the amounts of debts and the LP s assets a number of items of information were disclosed Following satisfaction of the claims of secured creditors there would be 37500000 worth of assets remaining in the debtor s estate from which to pay pro rata 250000000 worth of unsecured debts Investigation by the attorney for the creditors committee revealed that on April 14 2009 ABC Corporation was insolvent Nevertheless on that date the debtor paid 2500000 to XYZ Corporation in full satisfaction of a previous debt owed for the purchase of supplies Further on August 1 2008 the debtor had paid a fee of 3500000 to the accounting firm of Larry Curley and Moe CPAs a partnership for accounting services rendered by Bernie Moe CPA who was a Shareholder in ABC Corporation What can the trustee do if anything based on these facts Chapter 11 petition was filed June 1 April 14th XYZ corp got 25000 and it was within 90days Payment to Accounting firm was beyond 90days period but one of the members of that firm was shareholder in the debtor so we can go back 1 year back So Trustee can set aside that transaction What is the main thrust of the Securities Act of 1933 The Securities Exchange Act of 1934 1933 Registration statement a document that has to be filed with securities exchange commission before a security can be offered 1934 subsequent trading of securities and that will be an issued concern Burl Bigwig purchased newly issued stock of Widgets Inc a corporation whose stock is listed on the New York Stock Exchange Widgets has numerous shareholders located throughout the United States Widgets board of directors authorized the new issue the stock to be offered across state lines What federal statute would apply to this new issue How would it apply An PO initial public offer 1933 statue registration statement unchanged for 20 consecutive days before its effective full disclosure before the securities are even offered for sale What price agreements among competitors are legal None it s a per se violation Something is anticompetitive in nature Plaintiff purchased stock in Farthington Frog Farms Inc In his lawsuit Plaintiff alleges that the assets and profits of Farthington Frog Farms were being fictitiously reported in its financial statements When the true state of affairs became known the stock plummeted in value Plaintiff sued Farthington s accountants Cash Mudshack and Co for allegedly applying inappropriate accounting procedures with respect to the Farthington audits and for making untrue certifications of Farthington s financial statements If plaintiff was an individual suing entirely in his own behalf under the Securities Act of 1933 does the plaintiff have to show 1 a false statement of material fact in the registration statement 2 That plaintiff relied on the statement 3 That Cash Mudshack and Co was guilty of negligence 1 that is the basis of the law yes 2 no 3 no Plaintiff sues the issuer Farthington Frog Farms Accounting firm might have been sued by the plaintiff or the Fathington gave them an invite to the party If a plaintiff was proceeding under Section 10 b of the Securities Exchange Act of 1934 what would the plaintiff have to show the existence of a material factual misrepresentation or omission reliance by the plaintiff on the financial statements damages suffered as a result of reliance on the financial statements scienter What debts are not dischargeable in bankruptcy Child support taxes damages caused by drunk driving damages from intentional tort What are the distribution priorities in a bankruptcy case Some may or may not apply The order of Things like child supportnondischargeable Administrative expensesike lawyers fee wages and salaries up to an amount employee benefit claim consumer deposits taxes and fines claims from DWI and intended tort court orders Bo Peep Pettigrew was sole proprietor of Bo Peep s New and Used Antiques She decided to incorporate her business and issue stock to the public Advertisements were placed in the Dallas Morning News the Shreveport Times and the Arkansas Gazette advising the public that a public offering of stock in Bo Peep s New and Used Antiques Inc a Texas corporation was going to be made within sixty days and directing inquires to be made to the corporate secretary The stock was subsequently issued and sold to the public all the purchasers being Texas residents After doing business for several months Bo Peep began to get some competition from quotBessie s Old DoDads Inc quot whose principal stockholder was Bessie May Bloom Both corporations purchased antiques from all over the United States for resale but both of them were located in Malakoff Texas and solicited business mainly in the states of Texas Arkansas and Louisiana Bo Peep approached Bessie Mae with an offer which had been authorized by Bo Peep s board of directors The offer was that any antiques sold by them in their stores would be sold at a minimum markup a markup which was both a fair price for the public and one which would allow each corporation to provide quality goods and service to the public Bessie Mae s board accepted and approved the offer and the agreement was thus made Under these facts what are the issues under the federal securities statutes and under the antitrust statutes 2 bodies of law involved in this antitrust and securities regulations Prior to offering that stock to sale file a registration statement with the securities exchange competition Upon the filing of that registration statements could she go ahead and offer the sale she can offer the stock for sale after 20days from the day she filed the registration statement The price fixing agreement per se violation don t even need to apply law of reason it s unreasonable on the fact of law 10 What is a shortswing profit and what effect does it have on a corporation Shortswing profit profit that is realized from the purchase and sale of that insider and the purchase and sale occur in a 6 month time window Different from 10b antifraud a conventional insiderlike an officerdirectorshare holder realizes a shortswing profit resulting from the purchase and sale of that company s securities then that insider has to refund that shortswing profit to the company This doesn t even have to be fraudulent it can be done innocently But this shows how serious the role of insiders are Loses don t offset gains doesn t matter what order purchase and sale took place 11 An automatic stay results from a The filing of a voluntary Chapter 7 or Chapter 11 petition in bankruptcy b The filing of a suit under Section 11 of the Securities Exchange of 1934 c The filing of an action under Section 10b of the Securities Exchange of 1934 d The filing of a financing statement 12 A debtor in a bankruptcy may choose to categorize exempt assets based on either state law or based on the exemptions under the federal bankruptcy statue a True b False 13 Who is eligible for Chapter 13 relief under the Bankruptcy Code a Corporations b Partnerships c Individuals d All of the above 14 Which of the following cannot be initiated by an involuntary petition a Chapter7 b Chapter 11 c Chapter 13 15 Which of the following statements is true a Only corporations limited liability companies partnerships and limited partnerships can file a Chapter 11 petition b Any debtor may file a chapter 11 petition c A chapter 11 case cannot be quotrolled over into Chapter 7 16 If after a debtor receives a discharged in bankruptcy it is discovered that the debtor acted fraudulently or dishonestly during the bankruptcy proceeding what is the consequence to the debtor That discharge can be revoked and can be criminal prosecution 17 What are private causes of action are available under the federal antitrust statutes Damages If so what kind Injections Under Sherman and Clayton provide private causes of action They want trusts busting Plaintiff has to prove that he was guilty of at least 1 violation Also that violation directly caused plaintiff to cause money damages Then that plaintiff can get economic damages and attorney fee Plaintiff may seek injunctive relief 18 In bankruptcy law what is quotCram down Creditors that are dissatisfied with money they get with reorganization See if its feasible and court has to approve the plan of CH 11 19 Fraud under the Securities Act of 1934 is broader than under the common law a True b False Common Law fraud in the execution inducement Securities Act of 1934 common law is embraced in 103 but it s not limited to that Also includes false information to impact price up or down fraud that affect the market 20 What are the differences in the following bankruptcy proceedings Chapter 7 Chapter 11 Chapter 13 Ch 7 bankruptcy Straight liquidation they are liquidation and divided to creditors Ever since 2005 act came it s less debtor friendly Ch 11 plan of re organization Debtor comes with the plan and court has to approve Then the debtor has to operate with that plan until credits are mostly paid off usually get more than ch 7 filing Ch 13 volunteery wage earners liquidation 21 With respect to the Federal Bankruptcy Act which of the following statements is correct a IA trustee has the power to set aside a voidable preference yes They can side aside within the time limit b A trustee may not set aside a transfer unless he can prove that it was fraudulent no fraudulent transfer can go back 2 years But can have other voidable transfer c A chapter 7 proceeding is no different than a chapter 13 proceeding d Both a and b 22 Securities regulation is found only in the Federal law a True b False 23 Price fixing is a per se antitrust violation under the federal antitrust statutes a True b False 24 In order for an activity to be subject to the federal antitrust statutes it must have an effect on what Interstate commerce They don t have to actually be involved in the interstate commerce to have an effect 25 The time window for filing a new bankruptcy after previously receiving a discharge has been increased under the new statute from six years to eight years a True b False 26 How are exempt assets determined under bankruptcy law 2 exemption list state law exemption each state has a statue on the book of the asset that are beyond the reach of creditors and the federal bankruptcy statue exemption Debtor can choice which list to follow to get the most exemptions 27 Generally speaking the 2005 bankruptcy legislation makes the federal bankruptcy law less quotdebtor friendly a True b False 28 A court case involving allegations of insider trading will be brought under a The Sherman Antitrust Act b The Securities Exchange Act of 1934 29 Under federal antitrust law there can be both private causes of action and criminal prosecution depending on the facts a True b False Sherman has criminal sanction Clayton has no criminal sanction 30 Under federal antitrust law the quotRule of Reason does not apply if the violation is a per se violation a True b False Secured creditors creditor that the debt is back up by either lad of real estate or securities agreement in personal property or acuity or guarantor General creditor Preferred creditor order of preference starts from top
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