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Heritage Spirits, Inc. is a Delaware corporation producing small-batch whiskey. CEO Dana Lewis is also the founder, controlling shareholder, and board chair. The CFO falsified production numbers and collateral data to secure a $100 million credit facility. Dana personally purchased a Martha’s Vineyard property using company funds and loan proceeds. She justified the purchase as a company expense because she hosted events at the property, but Dana and her family lived in the home year-round.  Other directors were unaware until the bank filed suit alleging loan default and misrepresentation. No board or shareholder approval was obtained for the purchase or related-party use of funds. If Dana later discloses the home purchase and the disinterested directors retroactively approve it after obtaining legal counsel, which result is most accurate?

The Unity Foods board approves a loan to its CEO on below-market terms to help her purchase company stock. The CEO abstains from the vote. A minority shareholder sues for breach of fiduciary duty.  Under Delaware law, which standard of review applies initially?

A director of Unity Foods, a Delaware corporation, personally invests in a supplier’s convertible-note round, later recommending that Unity purchase the same notes. The board discloses the conflict and approves.  Which of the following is true under Delaware law?

MapleTech, Inc. is a Delaware corporation with a seven-member board. Three directors are company executives; two others are long-time personal friends of the CEO who co-invested with her in several private ventures; and two are fully independent. Shareholders bring a derivative suit alleging the board wrongfully approved a below-market sale of corporate assets to the CEO’s wholly owned company. The complaint makes no pre-suit demand.  How should the court likely evaluate demand futility?

Two former Unity Foods employees, Aria and Devon, agree to “split profits 60/40” from a pop-up catering business they run together but never file any paperwork. When the business is sued, Aria claims they were just “co-owners” and not partners.  Which statement is most accurate?

During sale negotiations, directors rely exclusively on the CEO’s spreadsheet without fairness opinions or market checks.  Under Van Gorkom, liability arises if:

Kendall has developed a new fishing rod and needs $100,000 to build some inventory and cover the start-up costs for a new business.  Roman, a wealthy fishing nut who considers Kendall his closest friend, transfers $100,000 to Kendall, and they formed a manager-managed LLC.  Kendall and Roman agree that Kendall’s contribution of services to the LLC will be valued as a $200,000 contribution, that Roman’s contribution is the $100,000 cash he paid, and that there is no specific agreement on distributions by the LLC. There is also no agreement between Kendall and Roman regarding the transfer of membership interests. As to this venture,

A startup forms in Washington (an MBCA state) but lists a Delaware registered agent and holds board meetings in Texas.  Which jurisdiction’s law governs director-removal procedures?

A start-up must choose between selling assets or selling stock. Which statement correctly identifies a key distinction?

A bag of cement weighing 325 N hangs from the top of a construction lift by three wires as shown.  a) If the elevator is stationary, determine the tensions, T1, T2, and T3 in the wires if θ1 = 50˚ and θ2 = 40˚.  b) If the lift begins accelerating downwards at a rate of 0.8 m/s2, determine the tensions, T1, T2, and T3 in the wires once it begins accelerating.  a)                                                                                                                                   T1 = T2 = T3 =  b) T1 = T2 = T3 =