Book Opener

CHAPTERASSESSMENTAcquiring and Evaluating InformationUsing the newspaper, the Internet, or the locallibrary, research a recent corporate merger.Explain:14. The circumstances surrounding the merger.15. Problems or issues that occurred during themerger process.16. The advantages or disadvantages of themerger to the shareholders.Write a two-page paper discussing yourfindings.Takeover or Merger?In the 1990 movie Pretty Woman, EdwardLewis’s company sets out to execute a takeoverbid for James Morse’s company. Lewis eventuallydecides on a merger rather than a takeover.Debate17. Assuming that Morse’s company wouldhave been dismantled and sold after thetakeover, what effect might Lewis’sdecision have had?18. What impact would Lewis’s decision havehad on both companies, their owners(shareholders), and their employees?19. Do you think Lewis make the rightdecision? Why or why not?For the following cases, give your decision andstate a legal principle that applies.20. Ilsa Garthwaite owns Future-graphics, Inc.a fashion-design business specializing increating clothing for the super rich. Sheasks four of her best clients to choose aseason’s clothing line to sponsor. Shesuggests that each contribute $1 millionand explains that the return on the investmentwould depend on Future-graphics’sprofits. Does Ilsa’s sponsorship plan qualifyas a security? Explain your answer.21. Weldon Sackman and Frank Chandler arecompetitors and the only two farm equipmentdealers in the county. They make anagreement to divide the county’s territory,raise prices, and stop competing. If onebreaches the agreement, may the other suefor breach of contract? Explain your answer.22. Janet Juliano, an owner of stock in a corporationthat merged with another corporation,claims she was not notified of the mergeruntil after it was completed. Is this likely?Explain the usual procedure in a merger,and how a shareholder would be involvedin the process.23. Swallow & Ascot Books, Inc., a largechildren’s book publisher, owns threepercent of Pyatt, Inc., a leading comic-bookpublisher. Swallow decides to launch atakeover bid, with Pyatt as the target.Swallow offers the Pyatt shareholders $34per share. The current market value is $22per share. George Tackett sells his 50 shares,then changes his mind the next day. Is thereanything he can do? Explain your answer.24. The directors of the Mount Vernon ResearchCorporation sold tracts of land in itsdiamond mines under a series of landcontracts. In return, the purchaser of eachtract of land would be entitled to a returnon his or her investment based on the yearendprofits and in proportion to the numberof land contracts that he or she owned.Would the SEC consider each of thesecontracts a security? Explain your answer.664 Unit 6: Starting a Business