Lien of Shares

When the debt and the warrants are separable, the proceeds of their sale are allocated between them. The basis of allocation is their relative fair values. As a practical matter, these relative values are usually determined by reference to the price in the open market. The portion of the proceeds assigned to the warrants are accounted for as paid-in capital. The result may be that the debt is issued at a reduced premium or at a

"[b]uyer's sole [506] remedy in law or at equity in the event of Trustee's default shall be a refund of the deposit hereby received and, upon the delivery of the deposit refund, this agreement, and the sale contemplated by this Memorandum of Sale shall be null and void." Id. Sayres v. Wheatland Group,

qualifying under § 351, the transferor shareholder’s basis in stock received in the transferee corporation is

The plaintiff, First Colonial Bank for Savings entered into an interpleader action in the District court to determine who was entitled to the surplus proceeds from the foreclosure sale. The foreclosed property belonged to the defendants, Robert H. and Sherrell L. Bergeron, and the codefendants, Ford Motor Credit Company, the junior mortgagee of the foreclosed property as a result of corporate restructuring Ford Consumer Finance Company was substituted as the defendant for Ford Motor Credit Company. Both the Bergerons and Ford filed motions for summary judgement as they both felt entitled to the surplus. The district court ruled in favor of Ford Motor Credit Company and denied the Bergerons motion. The Bergerons appealed the decision of the District Court because they argued that they filed for and were discharged from bankruptcy prior to the foreclosure sale, therefore they believed that the security interest granted to Ford prior to their petition does not carry over to the surplus funds received after filing the petition.

of the acquiring corporation . . . , and the acquiring corporation must be in control of the other corporation immediately after the

Section 351(c)(2) allows shareholders to dispose of all or part of the transfers stock without preventing the corporations Section 351 transaction from satisfying the “ control immediate after” requirement (4). Section 351(d) states that there are times when services, certain indebtedness, and accrued interest not treated as property as per James v. Commissioner, 53 T.C. 63 (1969); cf. Hospital Corporation of America v. Commissioner, 81 T.C. 520

d. A parent exchanges its ownership interests or the net assets of a wholly owned subsidiary for additional shares issued by the parent’s less-than-wholly-owned subsidiary, thereby increasing the parent’s percentage of ownership in the less-than-wholly-owned subsidiary but leaving all of the existing noncontrolling interest outstanding.

Salomon v Salomon and Co. Ltd (1897) AC 22 - when Aron Salomon sold his business to Salomon and Co. Ltd. Company, where he was still the major shareholder and some of his family was also a member. He also received a debenture as part of the payment for a secured term. But when the company has gone into liquidation during the 1890’s some argued that his

Salamon v. Salamon & Co. Ltd has a significance principle that has been recognised universally. Refer to s16(5) in The Act, once company is registered, the new company is a juristic person that separate from its members. Likewise, company has the full responsible on its own debts and contractual

sale in the Arley financing then can be characterized as the sale of a share of common stock plus a

When a company is incorporated it is treated as a separate legal entity distinct from its promoters, directors, members, and employees, which confers the benefit of not being responsible for the companies debt on the members on the company. However even though a company is a separate legal entity and it attains the advantage of not laying the responsibility of company’s debt on the

When providing the distinction between the above charges the two stage process of legal characterization developed in Agnew must be applied by the English courts. The object of the first stage of the process is to ascertain the nature of the rights and obligations which the parties intended to grant each other in respect of the charged assets. Once these have been ascertained, the Court can then embark on the second stage of the process, which is one of categorization and designed to attribute the correct legal label to the package of rights and obligations. Lord Millett’s reasoning has been approved by the House of Lords in Re Spectrum in which emphasis was given to the freedom of the company to deal with the assets in the ordinary course of business rather than the two first criteria focusing on the nature of the secured assets.

All entities that hold financial assets or commitments to extend credit that are not accounted for at fair value through profit or loss

of minority shareholder claims (personal and derivative) for oppression under Section 216 of the Companies Act.

The leading case for this doctrine is between Salomon v A Salomon & Co in 1897. Salomon was a sole