5 Written questions
5 Matching questions
- 29. The small offering exemption exempts the sale of securities not exceeding $__________ during a 12-month period from registration with the Securities Exchange Commission (SEC).
E. No dollar limit
- 8. Bree, Gaby, Eddie, and Lynette form "Wisteria Lane LLC" which operates a home catering service and provides food, flower, photography, and other services for weddings. It is a member-managed LLC. Which of the following is true?
A. Bree can bind the LLC to contracts with third parties
B. Bree can compete with the LLC by offering her own wedding planning and production services
C. Bree has the right to participate in the management of the LLC
D. A and C
E. A, B, and C
- 33. General Motors Corporation files for Chapter 11 bankruptcy. Which of the following may be accomplished in a Chapter 11 bankruptcy?
A. Automatic stay of secured debt
B. Partial discharge of unsecured debt
C. Rejection of executory contracts and leases
D. All of the above.
E. A and C
- 9. Securities sold pursuant to the intrastate offering exemption are "restricted" securities (cannot be sold to out-of-state purchasers) for what period of time?
A. Six months
B. Nine months
C. One year
D. Two years
E. Three years
- 28. General Motors Corporation is (was) a major manufacturer of automobiles, trucks, SUVs, and other vehicles in the United States. General Motors has franchise agreements with 2,000 independent automobile dealerships across the United States that are independently owned businesses that sell General Motors vehicles. General Motors (who is more like a lieutenant than a general) sales have dropped 50% over the past two years. General Motors (whose "L" is much greater than its "a") files for Chapter 11 reorganization bankruptcy. General Motors wants to eliminate 1,000 of the automobile dealer franchises even though each of these franchises has ten more years to go before their expiration date. General Motors would ask the Bankruptcy Court to allow it to rescind 1,000 dealer contracts under which of the following doctrines?
A. Executory contract
B. Automatic stay
C. Discharge of debts
D. Antideficiency statute
E. The 1,000 dealership contracts cannot be avoided by General Motors
- a B. $1,000,000
- b A. Executory contract
- c B. Nine months
- d D. A and C
- e D. All of the above.
5 Multiple choice questions
- D. Area franchise
- E. B and C
- C. Chapter 11
- D. A and C
- C. Section 2 of the Clayton Act
5 True/False questions
19. Chanel, Prada, Louis Vuitton, and Gucci, all snotty, high-end and expensive fashion designers of fashion designer clothes, each individually decide that they will not sell their own snotty, high-end, and expensive fashion designer clothes to Wal-Mart, Target and Costco, all discount retailers, because the proletariat Wal-Mart, Target and Costco are not the suitable outlets to sell the designers' bourgeois snotty, high-end, and expensive fashion designer clothes. Wal-Mart, Target and Costco sue Chanel, Prada, Louise Vuitton, and Gucci for violating Section 1 of the Sherman Act by engaging in an unreasonable restraint of trade. Which of the following is (are) true?
A. Chanel, Prada, Louise Vuitton, and Gucci have engaged in an illegal group boycott
B. Chanel, Prada, Louise Vuitton, and Gucci have engaged in an illegal division of markets
C. Chanel, Prada, Louise Vuitton, and Gucci have engaged in legal conscious parallelism
D. Chanel, Prada, Louise Vuitton, and Gucci have engaged in an illegal price discrimination
E. A and D → A. Chapter 7
2. The McDonald's Corporation, a franchisor, grants a franchise to Ida, a franchisee, whereby Ida opens a McDonald's fast-food franchise restaurant in the O.C. (eh, Orange County). In the franchise agreement, McDonald's and Ida agree that Ida must place signs inside the restaurant, outside the restaurant, and on the drive-through menu which states that Ida's McDonald's restaurant is a franchise and that the McDonald's Corporation is not the principal of Ida's franchise and that McDonald's Corporation is not liable for any acts of negligence caused by the franchisee, Ida. Ida puts up all of the required signs. A month after Ida opens the franchise, Eric Cartman, a regular customer at Ida's franchise, slips on a BigMac hamburger that has fallen on the floor; Eric is terribly injured. The BigMac hamburger was on the floor for 4 hours before Eric slipped on it. Eric sues Ida and McDonald's Corporation to recover for his injuries. Is McDonald's Corporation liable?
A. Yes, because a franchise automatically creates a principal/agency relationship
B. Yes, because McDonald's Corporation created an apparent agency by allowing the franchisee to use its trade name and trademarks
C. Yes, because an implied agency was created
D. No, because a franchisor is never liable for the acts of a franchisee
E. No, because consumers have been notified that the McDonald's Corporation is not liable for the franchisee's negligent acts → C. Chain-style
13. Wal-Mart, Target and Costco, all discount retailers, decide to sell Shaquille O'Neal's, an NBA superstar, new instructional video "I can't shoot free throws, but you can!" They all agree that they will all sell the popular video for $49.99 (most videos of this type are priced at $19.95) and at no other price. This is an example of which of the following?
A. Division of markets
B. Tying Arrangement
C. Price fixing
D. Resale price maintenance
E. Group boycott → C. Price fixing
20. Smork, a USC freshman majoring in chemistry, invents a new body cream that, if rubbed on the skin, sucks out the body fat from that location; it is non-surgery liposuction. With this cream a user can "spot" the area that needs a little thinning, rub some cream on that area, and the fat disappears! Smork names the cream "LIFO "("last in, first off") and names his new corporation that will produce the cream LIFO, Inc. The potential for LIFO is tremendous as the phone rings off the hook with calls from Oprah, Monica, Allie, Rosey, et al. LIFO, Inc. is planning on going public and is preparing the materials to file its registration statement with SEC. What can LIFO Inc. not do during the prefiling period?
A. Make offers to sell its securities
B. Sell its securities
C. Condition the market
D. B and C
E. A, B and C → E. A, B and C
23. Planet Hollywood, Inc., a chain of over 100 restaurants worldwide, has failed to keep up with the times. Its financial statements now are now in the same shape as the restaurant chain' décor. Planet Hollywood needs time to redecorate, change its menu, and reinvent itself as a viable "going concern," Planet Hollywood files for chapter 11 Bankruptcy. Planet Hollywood has $100 million in unsecured debt but wants to come out of bankruptcy with only $40 million of unsecured debt. Planet Hollywood files a plan of reorganization in which it proposes to do away with $60 million of unsecured debt. Is this possible?
A. Yes, under the automatic stay rule
B. Yes, under partial discharge
C. Yes, under executory contract
D. No, no unsecured debt can be reduced under a Chapter 11 bankruptcy
E. No, unless Planet Hollywood proves "undue hardship" → C. Chapter 11