Walt Disney Corporation has decided to do a STATUTORY ordinary Merger with Playboy Enterprises is Walt. Disney will be the surviving company and is known for its will established brand image of cartoons and family entertainment television and amusement parks. Playboy Enterprise is known for its adult oriented magazine and television programming. For voting purposes and quorum requirements both companies follow a majority percentage rule Here is a breakdown of each company shareholders and Board of Directors: In Terms of Disney Only assume that everyone qualified to vote, votes. Assume also that anyone not mentioned as voting for the merger who is qualified to vote, votes against the merger. Mickey and Donald vote for the Merger. On the Board of directors side Mickey, Minnie, Red Riding Hood vote for the merger. Bugs and Daffy as Board of Director members have boycotted and failed to attend the BOD meeting. In terms of this situation on the DISNEY Side. The merger passes because 100% of the common voting shares voted for and a majority of the BOD has voted for the merger. The merger fails because there is no quorum for the BOD meeting, Bugs Bunny has a majority of the shares entitled to vote at the BOD meeting. The merger passes because in a statutory merger the BOD of the Surviving Corp. are the ones entitled to vote and not the shareholders of the surviving corporation. The merger fails because the requirements for shareholder approval under the Statutory merger format have not been met. In TERMS OF PLAYBOY ONLY, Brion and Pamela vote for the vo.es against .he merger. On .he BOD side, everyone except Hugh merger. In terms of this situation on the PLAYBOY side The merger fails because Hugh has a majority The merger fails because Hugh has a majority of the voting shares on the Board of Directors The merger fails because any scenario that involves Brion and Pam Anderson must be a dream Many stockholders are upset at this deal because it could ruin the "image of Disney (and of Playboy), I mean really Mickey and Minnie, if it turns out that the BODs of each corporation did not do any investigation regarding the compatibility of their compares/products and only decide to do this deal because the BOD members like each others product and figure that entertainment is entertainment. The stockholders could Sue the Corporations and/or BOD for breach of the duty of care Sue the Corporation and/or BOD for breach of the duty of loyalty Do nothing each Corporation is protected by the Business Judgment rule Sue the corporation and or BOD members for breach of the duty of obedience. In this question assume in TERMS of the ENTIRE MERGER, Bugs Bunny as Shareholder, Hugh Hefner and Pam Anderson as Shareholders vote for the merger and Red, Bugs and Daffy (BOD members) and Richard, James, and Paris (BOD members) vote for the merger than the Merger passes Merger fails Ford Motor Company in the 1960's came up with an automobile called the Edsel. The auto was produced as a result of a well researched marketing study that stated this kind of car should sell well. The car was a colossal BOMB and lost the company 410 million dollars nearly 78% of the total revenue of the company for the year 1963. As a result, the stock price plummeted from $30.00 a share to just over SI 1.00 a share. In this situation the officers and/or directors of the corporation probably: violated the duty of care violated the duty of loyalty violated the duty of obedience none of the above
