Superal Corp. authorized 100,000 shares and issued all of them during its first six months in operation.
Question:
Superal Corp. authorized 100,000 shares and issued all of them during its first six months in operation. Avril purchased 10,000 of the shares (10 percent). Later, Superal reacquired 10,000 of the shares it originally issued. With shareholder approval, Superal has now amended its articles so as to authorize and issue another 100,000 shares. It has also, by a resolution of the board of directors, made plans to reissue the 10,000 shares of treasury stock (the shares reacquired by the corporation). The corporate articles do not include a provision dealing with shareholders’ preemptive rights. Because of her ownership of 10 percent of Superal, Avril claims that she has the preemptive right to purchase 10,000 shares of the new issue and 1,000 shares of the stock being reissued. Discuss her claims.
Step by Step Answer:
Preemptive rights is a common law concept that gives an existing shareholder preference over others ...View the full answer
Business Law Text and Cases
ISBN: 978-0324655223
11th Edition
Authors: Kenneth W. Clarkson, Roger LeRoy Miller, Gaylord A. Jentz, F
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