Question #1 (5 points)

The board of directors for ABC Corporation took out a $30 million dollar loan to invest in capital expenses. After the company received the loan, the board voted to spend all the money on lobbying efforts in state and national legislatures. During that time, the company reported a $50 million dollar decrease in worth. Disgruntled, the company shareholders sue the board for the devaluation of the company and their stock.

What type of lawsuit should the shareholders bring? What defense should the board raise? Who will likely be successful in the lawsuit? Why?

Question #2 (5 points)

In December 2020, the Federal Trade Commission (FTC) and 46 states sued Facebook, alleging Facebook violated antitrust laws by buying competitors to eliminate competition in the social media industry.

If you were representing the FTC, what is the strongest legal argument that Facebook is violating antitrust laws. (Note: you need to be specific about what laws are being violated.)

If you were representing Facebook, what is the strongest legal argument that you are not violating antitrust laws. (Note: you need to be specific about what laws are involved.)

Extra Credit(5 points):

Recent Supreme Court cases have held that corporations are "persons" that have the Constitutional right to freedom of speech and freedom of religion. Critics say that the Supreme Court decisions are erroneous because corporations are merely a business entity that exists in the tax code.

Do you believe the Supreme Court is correct? Why or why not?