Buy Without Your Bank

Fundamental Changes – BTIs A.  amendment of aoi - 2/3 of all shares entitled to vote B.  merger - ZAP, Inc. could merge with Terminix, Inc. => everything of ZAP is absorbed into Terminix - Plan of Merger:  who are the merging parties, terms, who survives the merger - effect on ZAP SHs:  they can’t own ZAP stock anymore b/c ZAP won’t exist (sometimes $ sometimes new mergers shares, etc.  the merger plan decides this) - approval: (gets approved by both corp’s SHs) - plan of merger - acted on by BOD  (BOD could block by not submitted vote to SHs) - SH 2/3 vote (of all entitled to vote!) - file articles of merger - surviving corporation’s exceptions:  if its a small merger that doesn’t affect the Survivor too much & dependent upon the plan of merger, then we can get around a SH vote - SH hold same no. of shares - doesn’t change voting proportions by more than 20% - SH’s right to dissent - appraisal => - gets fair value on his shares - you can merge a subsidiary into a parent; this also gets around SH approval (unless over 10% of the sub’s shares are not owned by Terminix) C.  share exchange 1. just like the triangular merger 2. is a more direct way for ZAP to merge under Terminix w/o Term having to set up the subsidiary 3. it’s a way for Terminix to force all the ZAP SH’s to sell them their shares (but only req’s a 2/3 vote) D.  sale of substantially all the assets outside the ord. course of bsns  [outside scope = not going to continue any bsns] - use this if the parent doesn’t want to acquire any debts/liabilites of little corp.; they just want the assets and to acquire it as a going concern - process: - ZAP sells assets to Terminix; could even include selling its name to Terminix. - Terminix gives cash to ZAP. - ZAP, Inc. will usually dissolve, pay out the ¢ recv’d from sale, to the SHs.  (Dissolution also requres 2/3 approval.) - bod must submit and 2/3 must approve (if P doesn’t want to => dissent & appraisal) - successor liability***what about later arising liabilities???  too bad b/c Texas does not recognize ‘de facto’ mergers! - what if tort occurs from product after dissolution?  you can’s sue anyone E.  Conversion 1. plan of conversion converst Inc. into an LLP 2. BOD submits, 2/3 vote 3. SHs can dissent 4. file art. of conversion & you’re done! F.  Dissolution 1. BOD submits; 2/3 vote of SHs 2. pay off creditors/liabilities 3. then SHs split up rest of $

Read more:
What are the Fundamental Changes?