Question
Y Corporation has 100 shares of common stock and 200 shares of nonvoting preferred stock outstanding. Alice owns 80 shares of Y common stock and
Y Corporation has 100 shares of common stock and 200 shares of nonvoting preferred stock outstanding. Alice owns 80 shares of Y common stock and 100 shares of its preferred stock. Cathy owns the remaining 20 shares of Y common and 100 shares of Y preferred stock. Alice and Cathy are not related. In each of the following alternative situations, determine whether the redemption satisfies the requirements of 302(b)(2):
(a) On January 15, Y corporation redeems 75 of Alices preferred shares.
(b) Same as (a), above, except that Y also redeems 60 shares of Alices common stock.
(c) Same as (a), above, except that Y also redeems 70 shares of Alices common stock.
(d) What difference would it make in (c), above, if, on December 1 of the same year, Y redeems 10 shares of Cathys common stock?
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