Directors of a corporation vote to pay a large shareholder distribution after receiving financial statements and a later warning that the statements overvalue inventory. The corporation becomes unable to pay a creditor...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
...erting a corporate opportunity. The board appointed two disinterested directors to review the demand. After interviewing the officers, reviewing emails, and receiving outside counsel's report, the board refused to sue. I...
Citations: Model Business Corporation Act secs. 7.40-7.47, Federal Rule of Civil Procedure 23.1 derivative-pleading principles
...distribution was permitted. The controller then privately emailed all directors warning that the balance sheet counted obsolete inventory at full value and that the distribution would leave Sierra unable to pay the bank...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
...oration enters a services contract with a company owned by one of its directors. The director's interest is challenged after the corporation later loses money on the contract. Which statement best describes the governing...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
A corporation's directors want to approve a major contract without holding a meeting. Four of five directors email "approved," and the fifth director does not respond. Which statement best describes the usual consent pro...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
A derivative complaint alleges that directors of a corporation approved a risky inventory program after a short meeting. The directors argue that they cannot be liable because the program might have succeeded. Which stat...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
...he director's ability to rely on the report? This question tests when directors may rely on officers, experts, and committees. Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
Harbor Snack Co., had five directors. Its bylaws required board approval for supply contracts over $500,000. The president negotiated a $1.2 million almond contract with Grower. Three directors responded "looks fine" in...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
...Lens, Inc., created an "Executive Growth Committee" composed of three directors. The board resolution authorized the committee to negotiate ordinary-course customer contracts and to recommend acquisitions. Six months lat...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
...? Correct. The answer should identify the governing rule for Warrants and Exceptions and apply it to the operative facts. This choice applies the governing rule to the operative facts and leaves room for the strongest co...
...s? Correct. The answer should identify the governing rule for Arrests and Stops and apply it to the operative facts. This choice applies the governing rule to the operative facts and leaves room for the strongest counter...
...swer should identify the governing rule for Fourth Amendment Searches and apply it to the operative facts. This choice applies the governing rule to the operative facts and leaves room for the strongest counterargument.
...uiring shareholder approval, fill a board vacancy, change the bylaws, and approve ordinary customer renewals within the authority delegated by the board. Which statement best describes the committee's authority? This que...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
...ich statement is most accurate? This question tests officer authority and apparent authority in corporate contracts. Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
...eral ordinary-course vendor decisions made by the board. The articles and bylaws do not shift ordinary management authority to shareholders. Which statement best describes the default rule? This question tests the defaul...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
.... Months later, the director is dismissed from the case on the merits and seeks reimbursement of expenses actually and reasonably incurred. Which statement is most accurate? This question tests director and officer indem...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
...ctor attends the board meeting and argues for the contract. The other directors know the material facts about the director's ownership before voting. Which statement most accurately describes the board-approval route for...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
...wer rent with a shorter commitment. At a meeting attended by all five directors, Lee spoke in favor of the lease and voted for it. Two other directors also voted for it, while two opposed. No shareholder vote was taken...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
...regulatory review is underway," but it did not attach the review. Two directors had received separate emails from the compliance manager warning that the test kit packaging might violate applicable labeling rules and tha...
Citations: Model Business Corporation Act secs. 8.01, 8.20-8.25, 8.30, 8.31, 8.32, 8.42, 8.50-8.59, 6.40, 7.32
Police investigate an incident, prosecutors charge a suspect, and the defendant challenges a key part of the case. Officers entered a private area without a warrant after observing suspicious conduct. Another actor chang...
Citations: Model Penal Code and common law criminal-law principles
Police investigate an incident, prosecutors charge a suspect, and the defendant challenges a key part of the case. Officers entered a private area without a warrant after observing suspicious conduct. Another actor chang...
Citations: Model Penal Code and common law criminal-law principles
...to the academy's sex-based track exclusion, the equipment-carry test, and the parental leave rule. This essay tests intermediate scrutiny for gender classifications and the bar-exam distinction between real fit and sex-b...
Citations: U.S. Const. amend. XIV, United States v. Virginia, Craig v. Boren, Nevada Department of Human Resources v. Hibbs
...to the academy's sex-based track exclusion, the equipment-carry test, and the parental leave rule. This essay tests intermediate scrutiny for gender classifications and the bar-exam distinction between real fit and sex-b...
Citations: U.S. Const. amend. XIV, United States v. Virginia, Craig v. Boren, Nevada Department of Human Resources v. Hibbs
...ence. Analyze the First Amendment issues raised by the two ordinances and by the charges against the two speakers. This essay tests symbolic speech, expressive-conduct regulation, true threats, fighting words, and overbr...
Citations: Texas v. Johnson, United States v. O'Brien, Virginia v. Black, Counterman v. Colorado, Chaplinsky v. New Hampshire
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