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Casey, a recent WSU business student graduate, decided to incorporate her business under the name Casey Consulting, Inc. The directors of Casey Consulting learn that
Casey, a recent WSU business student graduate, decided to incorporate her business under the name Casey Consulting, Inc. The directors of Casey Consulting learn that an outsider is planning on buying enough voting stock to get herself elected to the board of directors. Casey Consulting, which has cumulative voting, quickly puts together a vote of shareholders to eliminate the company's cumulative voting procedure. The shareholders vote to do away with cumulative voting. The outsider, Denise, who wanted to get herself elected to Casey Consulting's board, claims that the company has committed an illegal act. Is she right? No. Under the Model Act, regardless of Casey Consulting's motives, it had the right to act as it did. Yes. The United States Supreme Court has ruled that a publicly held corporation that purposefully sets about to eliminate cumulative voting to prevent a person from getting herself elected to the board has acted illegally. O No, provided Casey Consulting did not change its cumulative voting provision solely for the purpose of preventing a particular person from taking advantage of that right. Yes, but only if Casey Consulting is incorporated in a state that has adopted the Model Act
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