Fresh Fish, Inc. owned ninety-five percent of the shares of its subsidiary corpo

Question

Fresh Fish, Inc. owned ninety-five percent of the shares of its subsidiary corporation Polly's Aquatic Friends, Inc. The board of directors of Fresh decided to merge Polly's with Fresh. The board did not consult the shareholders of either company before the merger. If a shareholder tried to challenge the merger, how would a court most likely rule?

a. A court would likely hold that Fresh could merge with Polly's without shareholder approval because it owned more than ninety percent of the outstanding shares of Polly's. b. A court would likely hold that Fresh could not merge with Polly's without at least thirty percent approval by shareholders from both corporations. c. A court would likely hold that Fresh could not merge with Polly's without one hundred percent approval by shareholders from Fresh. d. A court would likely hold that Fresh could not merge with Polly's without one hundred percent approval by shareholders from Polly's.

Explanation / Answer

a. A court would likely hold that Fresh could merge with Polly's without shareholder approval because it owned more than ninety percent of the outstanding shares of Polly's.

As this is a merger, hence in this case it is consolidation of two entities into one and therefore the approval may not be required in order to make this work out

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.