unit_9_madej_case analysis

unit_9_madej_case analysis - corporate reorganization in...

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Unit 9 Case Analysis 1 Unit 9 Case Analysis Danielle Madej LS 311-02 Toni Starcher April 4, 2011
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Unit 9 Case Analysis 2 In the case of Langley Brothers, Inc., exempt securities are in question. The Langley Brothers decide to sell no par common stock worth $1 million to the public. The stock will only be sold in the state of Kansas. Joseph Langley says that the offering does not need to be registered with the Securities and Exchange Commission. His brother, Harry disagrees. According to the Securities Act of 1933 there are a number of specific securities that are exempt to registration but they must meet certain criteria. These criteria are the securities 1) must be government issued, 2) bank and financial institution securities, 3) short-term notes and drafts, 4) securities of nonprofit, education and charitable organizations, 5) securities issued by common carriers, 6) insurance issued by a state-regulated insurance company, 7) securities issued in a
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Unformatted text preview: corporate reorganization in which one security is traded for another and 8) securities issued in stock dividends and stock splits (Miller & Jentz. 8 th Ed., 2008. p. 568). The stock that is being sold in this case does not meet any of the criteria. The one criteria that this stock does meet is the intrastate offerings Rule 147. Rule 147 states that intrastate transactions involving purely local offerings are exempt transactions (Miller & Jentz. 8 th Ed., 2008. p. 571). As long as Langley Brothers Inc. offers stock only in the state of Kansas then they are exempt from registering their securities with the Securities and Exchange Commission. Jason is right in this case as long as Langley Brothers Inc. follows the laws that are set in the state of Kansas. Unit 9 Case Analysis 3 References Miller, Roger LeRoy, & Jentz, Gaylord A. (2008). Fundamentals of Business Law Part I . Ohio: Cengage Learning....
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unit_9_madej_case analysis - corporate reorganization in...

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