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Law
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Case Study
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Law Case Study and Questions - Greenmail

Case Study Instructions:
Question 1. Discuss the following takeover defense terms: greenmail; Pac-man; poison pill; and white knight. Question 2. Describe the procedure for a merger or a consolidation. Question 3 In November 2002, Mario Bonsetti and Rico Sanchez incorporated Gnarly Vulcan Gear, Inc. (GVG), to manufacture windsurfing equipment. Bonsetti owned 60 percent and Sanchez owned 40 percent of the corporation's stock, and both men served on the board of directors. In January 2006, Hula Boards, Inc., owned solely by Mai Jin Li, made a public offer to Bonsetti and Sanchez to buy GVG stock. Hula offered 30 percent more than the market price per share for the GVG stock, and Bonsetti and Sanchez each sold 20 percent of their stock to Hula. Jin Li became the third member of the GVG board of directors. In April 2008, an irreconcilable dispute arose between Bonsetti and Sanchez over design modifications of their popular Baked Chameleon board. Despite Bonsetti's dissent, Sanchez and Jin Li voted to merge GVG with Hula Boards under the latter name. Gnarly Vulcan Gear was dissolved and production of the Baked Chameleon ceased. 1. What rights does Bonsetti have (in most states) as a minority shareholder dissenting to the merger of GVG and Hula Boards? 2. Could the parties have used a short-form merger procedure in this situation? Why or why not? 3. What is the term used for Hula's offer to purchase GVG stock? 4. Suppose that after the merger, a person who was injured on the Baked Chameleon board sued Hula (the surviving corporation). Can Hula be held liable for an injury? Why or why not?
Case Study Sample Content Preview:

BUSINESS LAW
Name
Institution Affiliation
Course
Date of Submission
Business Law
Greenmail is defined as the act of buying shares that are enough to increase the risk of takeover in a company or a firm which may lead the targeted firm to have to buy the shares back at a higher cost or premium in order to prevent the chances of a takeover. Pac man is the game of arcade that was created away by Namco and currently under the license of Midway which is distributed mostly in the United States of America from the 1980s and was first sold in Japan in 1980. Poison pill is the tactic used by a company or firm which is facing a possible unwelcome takeover in which it makes itself less attractive to the bidder by somehow degrading its stocks. White knight is a term used to refer to a company which makes a very friendly offer to counter another offer made by other companies in order to save a target company from a possible hostile takeover bid.
A merger is a business term used to refer to the proces...
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