On January 1, Maria and Reuben decide to open a law firm (“M…

On January 1, Maria and Reuben decide to open a law firm (“Maria & Reuben Law Partners”). They agree that the firm will open its doors to the public on January 15. On January 5, Reuben, acting in the name of “Maria & Reuben Law Partners,” calls Peter, a printer, and orders 5000 business cards. When, on January 6, Maria learns of this order, she promptly calls Peter and tells him that she does not approve of the purchase and “won’t be held responsible.” Peter insists that both Reuben and Maria are liable to him. Can Peter hold Maria and/or Reuben personally liable?

Emily owns 92% of the outstanding stock of Blue Corp, a Dela…

Emily owns 92% of the outstanding stock of Blue Corp, a Delaware corporation that is closely held.  The directors of Blue Corp. (all of whom have been selected by Emily) approve a statutory short-form merger of Blue Corp. into Rainbow, Inc., a corporation in which Emily owns 100% of the outstanding shares.  Pete Prism, one of the Blue Corp. shareholders holds 1.3% of Blue Corp’s outstanding stock and wants to challenge the merger.  As part of the merger, Pete will be paid $50/share for each of his shares in Blue Corp.  However, the other documents disclosed to Pete clearly show that Blue Corp. should be valued at $300/share.  Pete wishes to bring a claim against Blue Corp. and to receive a fair payment for his Blue Corp. shares.  What type of claim, if any, has the greatest likelihood of success for Pete?

Alvin is the President of AZ Products, Inc. (“AZ”), a corpor…

Alvin is the President of AZ Products, Inc. (“AZ”), a corporation whose stock is publicly traded.  Morgan is an AZ shareholder.  One evening Morgan runs into Alvin at a party. Alvin knows Morgan is an AZ shareholder.  Alvin, who has had too much to drink, tells Morgan that if she will drive him home safely, he will give her confidential information about the company.  Morgan drives Alvin home and at the end of the ride, Alvin says, “Thanks for the ride.  As promised, I am telling you that AZ is about to announce a huge breakthrough in our research.  Do not sell your stock.”  Morgan, who was thinking about selling her stock in AZ determines not to do so, based upon this information from Alvin.  When AZ makes its big announcement, the AZ stock soars, and Morgan’s AZ shares are worth $100,000 more than they would have been had she sold them as she had originally intended.  Would Morgan face potential liability under Rule 10b-5?