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joecjr
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Joined: 10 Oct 2009
Location: United States
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Posts: 974

Posted: 26 Jun 2010 at 15:40 \| IP Logged

Golden Enterprises, Inc. entered into a contract with Hidalgo Corporation for the sale of its mineral holdings. The transaction proved to be ultra vires. Which of the following parties, for the reason stated, may properly assert the ultra vires doctrine?

A Golden enterprises to avoid performance

B A shareholder of Golden Enterprises to enjoin the sale.

C Hidalgo Corporation to avoid performance.

D Golden Enterprises to rescind the consummated sale.

The correct answer is B. how de we know who the responsible party is for performance with the way it is worded? Does it matter or just know that a shareholder can bring a derivative suit for these actions?

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FAR [83] 1109 Yaeger
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kcd1
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Joined: 24 Aug 2009
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Posts: 71

Posted: 29 Jun 2010 at 01:32 \| IP Logged

Yep. Three things can happen because of ultra vires:

1) Shareholders or corp can sue officers.
2) Shareholder can get an injunction.
3) State can dissolve corp.

A, C, and D don't make any sense. And when the question starts out with a Corporation, assume that's the Corporation or reference they are after, unless otherwise stated in the question.

joecjr
Major Contributor

Joined: 10 Oct 2009
Location: United States
Online Status: Offline
Posts: 974

Posted: 29 Jun 2010 at 10:53 \| IP Logged

thanks kcd1

__________________
FAR [83] 1109 Yaeger
AUD [90] 0510 Roger CPA
BEC [76] 0810 Yaeger/Gleim
REG [80] 1110 Yaeger
Done 12/16/2010
1year & 4months

Philadelphia, PA
joey_cjr@yahoo.com

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