Practice question
After shareholder authorization of an asset sale, the board considers abandonment. An adviser says approval either makes abandonment impossible or lets the board ignore every third-party contract right. Which is correct under Section39?
- The board may abandon without further shareholder action, subject to third-party rights under related contracts
- Approval always makes abandonment impossible
- Abandonment automatically cancels every contract without consequence
- Only the buyer may act as the seller’s board
- Shareholders must always repeat the same vote regardless of the section
Legal references
- RA11232 Revised Corporation Code: https://lawphil.net/statutes/repacts/ra2019/ra_11232_2019.html Section39.
- Y-I Leisure v. Yu, GR207161, September8 2015, main opinion: https://lawphil.net/judjuris/juri2015/sep2015/gr_207161_2015.html Asset-disposition context.
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