Business Associations

by Klein, William A.

• ISBN13: 9781599410425
• ISBN10: 1599410427
• Edition: 6th
• Format: Hardcover
• Copyright: 2006-06-30
• Publisher: Foundation Pr

Summary

The Sixth Edition is a concise, up-to-date casebook that provides an overview of business associations, agencies, partnerships, and corporations. Adopted in more than 100 schools since its initial publication, this book continues to emphasize the importance of a clear understanding of agency and partnership principles in the study of corporate law. This new edition contains a number of important developments and interesting new cases since the prior edition. Supplemental Materials: PowerPoint Slides -- Co-author Stephen Bainbridge's updated PowerPoint slides cover almost all sections of the book and feature more extensive use of data, graphics, and photos. Most presentations are designed to be taught in one 75-minute class. Comprehensive Teacher?s Manual

Table of Contents

Preface	iii
Editorial Note and Acknowledgment	v
Table of Cases	xxiii
Agency	1	(90)
Who Is an Agent?	1	(13)
Gorton v. Doty	1	(5)
Analysis	6	(1)
Introductory Note	6	(1)
A. Gay Jenson Farms Co. v. Cargill, Inc.	7	(5)
Note	12	(1)
Analysis	12	(1)
Planning	13	(1)
Liability of Principal to Third Parties in Contract	14	(33)
Authority	14	(1)
Mill Street Church of Christ v. Hogan	14	(2)
Analysis and Problems	16	(1)
Apparent Authority	16	(1)
Lind v. Schenley Industries, Inc.	16	(5)
Note	21	(1)
Analysis	21	(1)
Planning	22	(1)
Three-Seventy Leasing Corporation v. Ampex Corporation	22	(2)
Analysis	24	(1)
Planning And Economic Efficiency	25	(1)
Inherent Agency Power	25	(1)
Watteau v. Fenwick	25	(2)
Note	27	(1)
Analysis	28	(1)
Kidd v. Thomas A. Edison, Inc.	28	(3)
Analysis	31	(1)
Nogales Service Center v. Atlantic Richfield Company	31	(4)
Analysis	35	(1)
Problems	35	(1)
Ratification	36	(1)
Botticello v. Stefanovicz	36	(3)
Analysis and Problems	39	(1)
Estoppel	40	(1)
Hoddeson v. Koos Bros.	40	(3)
Analysis	43	(1)
Agent's Liability on the Contract	43	(1)
Atlantic Salmon A/S v. Curran	43	(3)
Analysis	46	(1)
Liability of Principal to Third Parties in Tort	47	(33)
Servant Versus Independent Contractor	47	(1)
Humble Oil & Refining Co. v. Martin	48	(2)
Hoover v. Sun Oil Company	50	(2)
Analysis	52	(1)
Planning	53	(1)
Policy Questions	53	(1)
Murphy v. Holiday Inns, Inc.	53	(4)
Analysis and Planning	57	(1)
Tort Liability and Apparent Agency	58	(1)
Miller v. McDonald's Corp.	58	(3)
Analysis	61	(1)
Problem	62	(1)
Scope of Employment	62	(1)
Ira S. Bushey & Sons, Inc. v. United States	62	(4)
Note	66	(1)
Analysis	67	(1)
Manning v. Grimsley	68	(2)
Analysis	70	(1)
Statutory Claims	70	(1)
Arguello v. Conoco, Inc.	70	(5)
Analysis	75	(1)
Liability for Torts of Independent Contractors	75	(1)
Majestic Realty Associates, Inc. v. Toti Contracting Co.	75	(4)
Analysis	79	(1)
Fiduciary Obligation of Agents	80	(11)
Duties During Agency	80	(1)
Reading v. Regem	80	(2)
Analysis	82	(1)
Problems	82	(1)
General Automotive Manufacturing Co. v. Singer	83	(4)
Analysis	87	(1)
Duties During and After Termination of Agency: Herein of ``Grabbing and Leaving''	87	(1)
Town & Country House & Home Service, Inc. v. Newbery	87	(3)
Analysis	90	(1)
Partnerships	91	(109)
What Is a Partnership? And Who Are the Partners?	91	(18)
Partners Compared With Employees	91	(1)
Fenwick v. Unemployment Compensation Commission	91	(4)
Analysis	95	(1)
Partners Compared With Lenders	96	(1)
Martin v. Peyton	96	(3)
Notes	99	(1)
Analysis	100	(1)
Planning	101	(1)
Southex Exhibitions, Inc. v. Rhode Island Builders Association, Inc.	101	(4)
Analysis	105	(1)
Partnership by Estoppel	106	(1)
Young v. Jones	106	(2)
Analysis	108	(1)
The Fiduciary Obligations of Partners	109	(23)
Introduction	109	(1)
Meinhard v. Salmon	109	(5)
Analysis	114	(1)
Planning and Policy	114	(1)
After Dissolution	115	(1)
Bane v. Ferguson	115	(2)
Questions	117	(1)
Grabbing and Leaving	117	(1)
Meehan v. Shaughnessy	117	(7)
Analysis	124	(1)
Problem	125	(1)
Expulsion	125	(1)
Lawlis v. Kightlinger & Gray	125	(6)
Analysis	131	(1)
Partnership Property	132	(4)
Putnam v. Shoaf	132	(3)
Analysis	135	(1)
Raising Additional Capital	136	(4)
Problem	136	(4)
The Rights of Partners in Management	140	(12)
National Biscuit Company v. Stroud	140	(2)
Analysis	142	(1)
Planning	142	(1)
Summers v. Dooley	142	(2)
Analysis	144	(1)
Moren ex rel. Moren v. JAX Restaurant	144	(2)
Analysis	146	(1)
Problem	146	(1)
Day v. Sidley & Austin	146	(4)
Note	150	(1)
Analysis	151	(1)
Partnership Dissolution	152	(45)
The Right to Dissolve	152	(1)
Owen v. Cohen	152	(3)
Legal Analysis	155	(1)
Note and Question	155	(1)
Collins v. Lewis	155	(5)
Note	160	(1)
Analysis	160	(1)
Planning	160	(1)
Page v. Page	160	(3)
Problems	163	(1)
The Consequences of Dissolution	163	(1)
Prentiss v. Sheffel	163	(2)
Analysis and Planning	165	(1)
Disotell v. Stiltner	166	(7)
Analysis	173	(1)
Pav--Saver Corporation v. Vasso Corporation	173	(5)
Analysis and Planning	178	(1)
Note	179	(1)
The Sharing of Losses	179	(1)
Kovacik v. Reed	179	(2)
Notes and Questions	181	(1)
Buyout Agreements	182	(1)
G & S Investments v. Belman	183	(4)
Planning	187	(1)
Law Partnership Dissolutions	187	(1)
Jewel v. Boxer	187	(4)
Problem	191	(1)
Questions	192	(1)
Meehan v. Shaughnessy	192	(4)
Analysis	196	(1)
Limited Partnerships	197	(3)
Holzman v. De Escamilla	197	(1)
Question	198	(2)
The Nature of the Corporation	200	(99)
Promoters and the Corporate Entity	200	(7)
Southern-Gulf Marine Co. No. 9, Inc. v. Camcraft, Inc.	202	(3)
Analysis	205	(1)
Planning	205	(2)
The Corporate Entity and Limited Liability	207	(25)
Walkovszky v. Carlton	207	(5)
Analysis	212	(1)
Planning and Policy	212	(1)
Sea-Land Services, Inc. v. Pepper Source	212	(6)
Note	218	(1)
Questions	218	(1)
Roman Catholic Archbishop of San Francisco v. Sheffield	218	(3)
Analysis	221	(1)
Introductory Note	222	(1)
In Re Silicone Gel Breast Implants Products Liability Litigation	222	(7)
Questions	229	(1)
Introductory Note	229	(1)
Frigidaire Sales Corporation v. Union Properties, Inc.	229	(2)
Analysis	231	(1)
Shareholder Derivative Actions	232	(50)
Introduction	232	(1)
Cohen v. Beneficial Industrial Loan Corp.	232	(4)
Analysis	236	(1)
Eisenberg v. Flying Tiger Line, Inc.	236	(3)
Analysis	239	(1)
Note on Settlements and Attorney Fees	240	(1)
Note and Question on Individual Recovery in a Derivative Action	241	(1)
The Requirement of Demand on the Directors	241	(1)
Grimes v. Donald	241	(8)
Analysis	249	(1)
Marx v. Akers	250	(5)
Analysis	255	(1)
Problems	255	(1)
The Role of Special Committees	256	(1)
Auerbach v. Bennett	256	(5)
Analysis	261	(1)
Zapata Corp. v. Maldonado	261	(8)
Analysis	269	(1)
In Re Oracle Corp. Derivative Litigation	269	(11)
Analysis	280	(1)
Subsequent Developments	280	(2)
The Role and Purposes of Corporations	282	(17)
A.P. Smith Mfg. Co. v. Barlow	282	(4)
Analysis	286	(1)
Note	286	(1)
Problem	287	(1)
Planning	288	(1)
Dodge v. Ford Motor Co.	288	(5)
Shlensky v. Wrigley	293	(4)
Analysis	297	(1)
Note	297	(1)
Problems	298	(1)
The Limited Liability Company	299	(29)
Formation	300	(5)
Water, Waste & Land, Inc. D/B/A Westec v. Lanham	300	(4)
Analysis	304	(1)
The Operating Agreement	305	(7)
Elf Atochem North America, Inc. v. Jaffari	305	(6)
Analysis	311	(1)
Piercing the ``LLC'' Veil	312	(5)
Kaycee Land and Livestock v. Flahive	312	(2)
Analysis	314	(1)
Problem	315	(2)
Fiduciary Obligation	317	(6)
McConnell v. Hunt Sports Enterprises	317	(5)
Analysis	322	(1)
Dissolution	323	(5)
New Horizons Supply Cooperative v. Haack	323	(4)
Analysis	327	(1)
The Duties of Officers, Directors, and Other Insiders	328	(205)
The Obligations of Control: Duty of Care	328	(46)
Kamin v. American Express Company	328	(3)
Analysis	331	(1)
Smith v. Van Gorkom	332	(10)
Aftermath	342	(1)
Note on Cinerama, Inc. v. Technicolor, Inc.	342	(2)
Analysis	344	(1)
Note on Legislative Response	345	(1)
Brehm v. Eisner	345	(9)
Aftermath	354	(1)
Analysis	355	(1)
Francis v. United Jersey Bank	356	(5)
Problem	361	(1)
In Re Caremark International Inc. Derivative Litigation	362	(10)
Analysis	372	(1)
Problems	372	(2)
Duty of Loyalty	374	(39)
Directors and Managers	374	(1)
Bayer v. Beran	374	(5)
Notes	379	(1)
Lewis v. S.L. & E., Inc.	379	(4)
Question on Compensation	383	(1)
Problems	383	(1)
Corporate Opportunities	384	(1)
Broz v. Cellular Information Systems, Inc.	384	(4)
Analysis	388	(1)
In Re eBay, Inc. Shareholders Litigation	389	(3)
Analysis	392	(2)
Problems	394	(1)
Dominant Shareholders	394	(1)
Sinclair Oil Corp. v. Levien	394	(4)
Analysis	398	(1)
Zahn v. Transamerica Corporation	399	(4)
Aftermath	403	(1)
Analysis	404	(1)
Ratification	405	(1)
Fliegler v. Lawrence	405	(2)
Analysis	407	(1)
In Re Wheelabrator Technologies, Inc. Shareholders Litigation	408	(3)
Analysis	411	(1)
Problems	411	(2)
Disclosure and Fairness	413	(65)
Definition of a Security	414	(1)
Robinson v. Glynn	415	(6)
Analysis	421	(1)
The Registration Process	421	(1)
Doran v. Petroleum Management Corp.	422	(6)
Note on Other Exemptions	428	(1)
Note on Securities Act Civil Liabilities	429	(3)
Escott v. BarChris Construction Corp.	432	(14)
Questions	446	(1)
Problem	446	(1)
Note on Integrated Disclosure and Exchange Act Disclosures	447	(2)
Rule 10b--5	449	(1)
Basic Inc. v. Levinson	450	(11)
Questions	461	(1)
Problem	462	(1)
West v. Prudential Securities, Inc.	463	(3)
Analysis	466	(1)
Note on Judicial Limitations on Actions Under Rule 10b--5	467	(1)
Santa Fe Industries, Inc. v. Green	468	(5)
Note	473	(1)
Analysis	473	(1)
Deutschman v. Beneficial Corp.	474	(3)
Problems	477	(1)
Inside Information	478	(33)
Goodwin v. Agassiz	478	(3)
Problems	481	(1)
Securities and Exchange Commission v. Texas Gulf Sulphur Co.	482	(10)
Notes and Questions	492	(1)
Introductory Note on Current Law	493	(1)
Dirks v. Securities & Exchange Commission	494	(6)
Analysis	500	(1)
United States v. O'Hagan	501	(6)
Notes and Questions	507	(4)
Short-Swing Profits	511	(9)
Reliance Electric Co. v. Emerson Electric Co.	511	(3)
Foremost-McKesson, Inc. v. Provident Securities Company	514	(2)
Notes on § 16(B)	516	(3)
Problems	519	(1)
Indemnification and Insurance	520	(13)
Waltuch v. Conticommodity Services, Inc.	521	(7)
Analysis	528	(1)
Citadel Holding Corporation v. Roven	529	(3)
Aftermath	532	(1)
Analysis	532	(1)
Planning	532	(1)
Note on Insurance	532	(1)
Problems of Control	533	(180)
Proxy Fights	533	(52)
Strategic Use of Proxies	535	(1)
Levin v. Metro--Goldwyn--Mayer, Inc.	535	(2)
Problem	537	(1)
Reimbursement of Costs	537	(1)
Rosenfeld v. Fairchild Engine & Airplane Corp.	537	(5)
Notes on the Regulation of Proxy Fights	542	(1)
Questions	543	(1)
Problem	543	(1)
Private Actions for Proxy Rule Violations	544	(1)
J.I. Case Co. v. Borak	544	(3)
Analysis	547	(1)
Mills v. Electric Auto-Lite Co.	547	(7)
Analysis	554	(1)
Problem	554	(1)
Seinfeld v. Bartz	555	(3)
Analysis	558	(1)
Shareholder Proposals	559	(1)
Lovenheim v. Iroquois Brands, Ltd.	559	(3)
Note	562	(1)
Analysis	563	(1)
The New York City Employees' Retirement System v. Dole Food Company, Inc.	563	(5)
Aftermath	568	(1)
Austin v. Consolidated Edison Company of New York, Inc.	568	(2)
Analysis	570	(1)
Problems	570	(1)
Shareholder Inspection Rights	571	(1)
Introductory Note	571	(1)
Crane Co. v. Anaconda Co.	572	(3)
State Ex Rel. Pillsbury v. Honeywell, Inc.	575	(3)
Questions	578	(1)
Sadler v. NCR Corporation	578	(5)
Problems	583	(2)
Shareholder Voting Control	585	(14)
Stroh v. Blackhawk Holding Corp.	585	(3)
Analysis	588	(1)
Note and Questions	589	(1)
Problem	589	(1)
State of Wisconsin Investment Board v. Peerless Systems Corp.	590	(8)
Note	598	(1)
Analysis	598	(1)
Control in Closely Held Corporations	599	(31)
Ringling Bros.-Barnum & Bailey Combined Shows v. Ringling	599	(7)
Analysis	606	(1)
McQuade v. Stoneham	606	(5)
Clark v. Dodge	611	(2)
Analysis and Planning	613	(2)
Corporate Planning By Use of Employment Contracts	615	(1)
Note on Shareholder Agreements, Voting Trusts, Statutory Close Corporations, and Involuntary Dissolution	616	(2)
Galler v. Galler	618	(5)
Analysis	623	(1)
Ramos v. Estrada	623	(4)
Analysis	627	(1)
Note on the Law in Other States	628	(1)
Problem	628	(1)
Note and Questions on Limited Liability Companies	628	(2)
Abuse of Control	630	(34)
Wilkes v. Springside Nursing Home, Inc.	630	(6)
Analysis	636	(1)
Ingle v. Glamore Motor Sales, Inc.	637	(5)
Analysis	642	(1)
Sugarman v. Sugarman	642	(4)
Analysis	646	(1)
Smith v. Atlantic Properties, Inc.	646	(4)
Analysis	650	(1)
Planning	650	(1)
Note and Questions	650	(1)
Jordan v. Duff and Phelps, Inc.	651	(11)
Analysis	662	(2)
Control, Duration, and Statutory Dissolution	664	(29)
Alaska Plastics, Inc. v. Coppock	664	(6)
Aftermath	670	(1)
Note on Meiselman v. Meiselman	671	(1)
Analysis and Planning	672	(1)
Note and Question on Limited Liability Companies	672	(1)
Haley v. Talcott	673	(7)
Analysis	680	(1)
Planning	680	(1)
Pedro v. Pedro	681	(5)
Decision	686	(1)
Analysis	686	(1)
Planning Issue	686	(1)
Stuparich v. Harbor Furniture Mfg., Inc.	687	(5)
Analysis	692	(1)
Transfer of Control	693	(20)
Frandsen v. Jensen-Sundquist Agency, Inc.	693	(4)
Zetlin v. Hanson Holdings, Inc.	697	(1)
Note and Questions on Control Premiums	698	(2)
Planning Problem	700	(1)
Perlman v. Feldmann	700	(4)
Analysis	704	(1)
Essex Universal Corporation v. Yates	705	(3)
Note on What Is a Control Block of Shares	708	(1)
Analysis	709	(2)
Problems	711	(2)
Mergers, Acquisitions, and Takeovers	713	(150)
Mergers and Acquisitions	713	(45)
The De Facto Merger Doctrine	713	(1)
Introductory Note	713	(2)
Farris v. Glen Alden Corporation	715	(6)
Aftermath	721	(1)
Analysis	721	(1)
Hariton v. Arco Electronics, Inc.	722	(1)
Analysis	723	(1)
Problem	723	(1)
Freeze--Out Mergers	724	(1)
Weinberger v. UOP, Inc.	724	(10)
Analysis	734	(1)
Note	735	(1)
Coggins v. New England Patriots Football Club, Inc.	736	(5)
Note	741	(1)
Analysis	741	(1)
Rabkin v. Philip A. Hunt Chemical Corporation	742	(4)
Aftermath	746	(1)
Analysis	747	(1)
De Facto Non--Merger	747	(1)
Rauch v. RCA Corporation	747	(1)
Discussion	748	(2)
Analysis	750	(1)
Problem	750	(1)
LLC Mergers	751	(1)
VGS, Inc. v. Castiel	751	(5)
Analysis	756	(2)
Takeovers	758	(105)
Introduction	758	(1)
Cheff v. Mathes	758	(8)
Other Facts	766	(1)
Note: ``Greenmail''	767	(1)
Analysis	767	(1)
Problem	768	(1)
Development	768	(1)
Introductory Note	768	(2)
Unocal Corporation v. Mesa Petroleum Co.	770	(9)
Note on SEC Reaction and Poison Pills	779	(1)
Note on ``Junk'' Bonds As the Back-End Consideration	780	(1)
Analysis	781	(1)
Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc.	781	(10)
Sidelights	791	(1)
Analysis	791	(1)
Paramount Communications, Inc. v. Time Incorporated	792	(9)
Note	801	(1)
Analysis	801	(1)
Paramount Communications Inc. v. QVC Network Inc.	802	(13)
Aftermath	815	(1)
Analysis	815	(1)
Note on Subsequent Delaware Developments	816	(3)
Extension of the Unocal/Revlon Framework to Negotiated Acquisitions	819	(1)
Omnicare, Inc. v. NCS Healthcare, Inc.	819	(18)
Analysis	837	(1)
Extension of the Unocal/Revlon Framework to Shareholder Disenfranchisement	837	(1)
Hilton Hotels Corp. v. ITT Corp.	837	(11)
Aftermath	848	(1)
Analysis	848	(1)
State and Federal Legislation	849	(1)
CTS Corporation v. Dynamics Corporation of America	849	(10)
Analysis	859	(1)
Notes and Questions on Other State Anti-Takeover Legislation	860	(3)
Corporate Debt	863	(40)
Introduction	863	(2)
Debtor's Sale of Substantially All Its Assets	865	(6)
Sharon Steel Corporation v. Chase Manhattan Bank, N.A.	865	(4)
Conclusion	869	(1)
Analysis	869	(1)
Planning	870	(1)
Incurrence of Additional Debt	871	(15)
Metropolitan Life Insurance Company v. RJR Nabisco, Inc.	871	(11)
Aftermath	882	(1)
Analysis	882	(2)
Negative Pledge Covenant and Cure Period	884	(2)
Exchange Offers	886	(8)
Background Note	886	(1)
Katz v. Oak Industries, Inc.	886	(6)
Problem	892	(1)
Analysis	893	(1)
Redemption and Call Protection	894	(9)
Morgan Stanley & Co. v. Archer Daniels Midland Company	894	(6)
Aftermath	900	(1)
Problem	901	(1)
Planning	901	(2)
Index	903