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Corpo Bar Qa

The document discusses several cases related to corporate law. It describes a case where a director bought shares in a major supplier of the company he directs and voted to approve contracts that were disadvantageous. It also discusses cases related to inspection of subsidiary records and intra-corporate disputes.

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Diego Duroy
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327 views

Corpo Bar Qa

The document discusses several cases related to corporate law. It describes a case where a director bought shares in a major supplier of the company he directs and voted to approve contracts that were disadvantageous. It also discusses cases related to inspection of subsidiary records and intra-corporate disputes.

Uploaded by

Diego Duroy
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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The Board of Directors of Mabini Corporation (MC) unanimously adopted a resolution directing its management to issue as fully

paid 10,000 common shares to Atty. Apolinario for successfully prosecuting in favor of MC the derivative suit filed by a minority
stockholder over mismanagement of corporate affairs. If the issuance of the 10,000 common shares in the name of Atty. Apolinario
is by way of stock dividends to be credited from the unrestricted retained earnings of MC, would such issuance be valid? Explain
your answer

No, the issuance of Stock Dividends to Atty. Apolinario would not be valid.
The board of directors may declare dividends out of the unrestricted retained earnings payable in cash, property or in stock to all
stockholders based on the outstanding stock held by them.
Stock dividend shall be issued with the approval of stockholders representing at least two-thirds (2/3) of the outstanding capital
stock at a regular or special meeting duly called for the purpose.
MC Stockholders, representing 2/3 of Outstanding Capital Stock, did not approve the declaration of Stock Dividends after the
Board of Directors' declaration.
Atty. Apolinario cannot receive MC Stock Dividends because he is not a Stockholder. The Stockholders did not approve said Stock
Dividends which are given only to registered Stockholders

6. Yoongi, a director of BTS Corp. PH, bought substantial shares of its major supplier, Hybe, Inc. When Hybe, Inc.’s contracts were
taken up by the BTS Corp. PH Board, Yoongi not only voted for their approval but influenced other directors to do so. Later, the
Hybe, Inc. contracts turned out to be disadvantageous to BTS Corp. PH and caused it substantial losses. Discuss the action/s that
may be pursued against Yoongi under the Revised Corporation Code. Explain briefly. (5 points)

BTS Corp shall file a civil action because Yoongi acquired personal and pecuniary interest in conflict with his duty as director when
he bought substantial shares of Supplier Hybe. Yoongi is liable for all damages consisting of BTS' losses. He must account and
refund to BTS Corp the profits which would have accrued to the corporation.

7. [This item has two questions.] LOKO Co., using a fraudulent scheme, was able to sell its shares to investors. The sale proceeds
were then secretly diverted by LOKO Co. to its wholly owned subsidiaries. Later, LOKO Co. became insolvent and was placed under
receivership. On behalf of the investor-stockholders, the receiver demanded the inspection of the books and records of LOKO Co.’s
subsidiaries.
(a) Can LOKO Co.’s stockholders exercise, through the receiver, their right of inspection of the books and records of LOKO Co.’s
subsidiaries? Explain briefly.

(a) LOKO Co.'s stockholders can inspect the books and records of LOKO'S subsidiaries. Piercing the Veil of Loko and its subsidiaries
can done because of Loko's Fraud in diverting the proceeds of their subscriptions.

(b) Is this a case of intra-corporate dispute? Explain briefly.


(b) Yes, this is a case of Intra-corporate Dispute between the Investors/StockhoIders versus Loko Co. The diverting of the
Investment Proceeds to Loko's subsidiaries is a detrimental act of FRAUD by Loko's corporate officers, which is detrimental to the
Investing stockholders;

8. EXIT Corp., no longer wanting to continue with its business, transferred to Entra, Inc. under an Asset Purchase Agreement all
its properties and assets including goodwill. A creditor of EXIT Corp. demanded from Entra, Inc. the payment of EXIT Corp.’s debt
for the reason that the transaction amounted to a merger and, therefore, the surviving corporation, Entra, Inc., must assume the
debts of the absorbed corporation, EXIT Corp. Is the creditor’s demand tenable? Explain briefly. (5 points)
Yes, the Creditor's demand for Entra, to pay Exit Corporation's Debt, is tenable. The Trust Fund Doctrine demands that the property
and other assets of a corporation be regarded as equity in trust to pay corporate creditors.
The Doctrine prohibits the Corporation from distributing its capital assets and properties to its stockholders ahead of its corporate
creditors. No distribution of assets among stockholders without paying the creditors first. Any disposition of corporate funds, to
prejudice the creditors, is null and void

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