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Not to Be Construed as Legal Advice: Texas de Facto Mergers  
03:06pm 31/01/2016
 
 
Mister Nihil
The next time you are playing a game of Apples to Apples, or its friend, Cards Against Humanity, or whatever descendent chooses that path to reality, remember: When the category is "Mythical Creatures," you can play your "Texas de Facto Merger" card with impunity.

"What," you say, "could that ever mean?"

Well, sit back for a moment, and I'll tell you a tale of conflict of laws.

In Farris v. Glen Alden, in the great state of Pennsylvania, in the year 1958, one company sold substantially all of its assets to another. This was, effectively, a merger of the two companies, but structured as an asset sale. Why? Because the shareholders of a corporation are allowed to vote on a merger, but they don't necessarily get to vote on a sale of assets. A sale of assets is basically the business of a corporation, and the shareholders have the board of directors to make everyday business decisions.
So, when Company A sells all of its assets except a box of paperclips, that's not technically a sale of all the assets, right?
The Pennsylvania courts said it can be. The court recognized a concept called de facto merger. This means there was not actually a merger, but the court is willing to pretend, to see that justice is done. This means that the shareholders get the rights attendant to an actual merger, even though one has not actually taken place. There are lots of shareholder rights attendant to a merger. Sometimes Batman counts them just to make himself feel crazy.

Fast forward to Texas.

In Mudgett v. Paxson Machine Co., some yahoo (the jerk, not the search company) tried to say "de facto merger" in Texas. Judge Utter explained, in no uncertain terms, that "ha ha ha, no."
What the court actually said was: "Certainly if the de facto merger doctrine is contrary to the public policy of our state, so must be the mere continuation doctrine." 709 S.W.2d 755, 758.

Mudgett was under the old Texas Business Corporation Act, though. The law must have changed considerably, right? Short answer: ha ha ha, no.

The Texas Business Organization Code has a section called 10.254. "DISPOSITION OF PROPERTY NOT A MERGER OR CONVERSION." That's not actually called "De Facto Merger, Ha ha ha, No," but that's how it's been interpreted.

Let's look at a couple more cases.

Let's not, actually. Just believe me, there are a couple of lines of cases in which the Texas courts progressively say, "Ha ha ha, no." Texas doesn't do de facto merger, except in one, very limited, nonexistent circumstance: Fraud.

"Common law fraud?", you ask. No, not common law fraud. "Actual fraud?", you follow up. No, not actual fraud. "What's up with your strange punctuation?", you ask. I don't actually know how to punctuate a declaratory statement that includes a quote of a question, so, just, chill a little.

What does all that even mean? Texas recognizes de facto merger only so far as the sale of assets is demonstrably a fraud to avoid liability. Like, for example, if a company "sold" all of its assets besides a box of paper clips to another very similar company, but the Paperclip Holding Co continued to owe its debts, but had no assets, but the new company was pretty clearly a sham to perpetrate a fraud (that's a term of art, meaning that it is a sham and that it is used to perpetrate a fraud. I guess it isn't a term of art, now that I say it out loud). In that tiny, limited circumstance, the court might decide to recognize de facto merger. But the court will not want to call it that, and that's not a guarantee, because there's not a lot of case law.

If there's a magic phrase in Texas business law, it's "but there's not a lot of case law." For example, Mudgett is a case from the court of appeals, and relies on several other appeals court decisions to make the statement that de facto merger is against public policy in Texas. There is that statutory guidance, which is helpful, but is not some kind of guarantee.

Although you can safely say there is no de facto merger in Texas, it's very hard to say exactly what that means, and what you can "get away with" while running your company. Here is a non-exclusive list of things you should feel uncertain about, all of them wrong and bad*.

  • Can you sell all your assets to avoid paying debts? Probably not, but maybe.

  • Can you sell all your assets and get out of your current business and go into the lemonade business for a summer and then wind up and not let your shareholders vote on the process until it's too late? Probably, but maybe not.

  • Can you sell the part of the company that's doing well, and keep the failing part separate and rename it and let it fail while you captain the successful part but leave the original investors with a pile of debt, while you laugh all the way to the bank? Not probably, but maybe.

  • Can you just steal all the money out of the treasury and go to Acapulco and disappear into a fruity drink? Probably not, maybe-butt. I'm out of permutations, but don't steal money, don't break the law, and don't do bad things.


OK, so, my point is, remember, if your scout master tells you to go look in the woods for a Texas De Facto Merger, you tell him to keep his snipes to himself. If he says Texas De Facto Merger is what's for dinner, bring your can opener, because you're eating beans.

This is not legal advice. Not at all. Go, do your own research and hire a lawyer, and tell your lawyer not to read this because reading this will actually invalidate any legal advice your lawyer gives you. Seriously. This is the anti-legal-advice. If this comes into contact with legal advice, they cancel each other out.
This is not legal advice, and is not to be construed as legal advice under any circumstances. This is more likely to turn into a floatation device than to be legal advice.
 
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The Last Days of the City  
02:13pm 25/08/2011
 
 
Mister Nihil


It started with a man in the village, a stranger, whom we discovered could speak only in quotations from Borges fictions, and those only when Borges quoted or interpolated others. He was revealed when he found himself suddenly unable to procure food at the stalls on the avenida. Other than a brief paragraph in his 1940 story regarding a Scot traveling the Penumbra of the Moon, Borges seems to have neglected any specifics regarding the ordering at restaurants. The man was taken to the castle, where the profusion of films already uploaded and distributed rendered the decision regarding his fate moot. The man was locked in a holding pen for a period not to exceed three days, and a doctor sent for and arrested to oversee his recovery, execution or entrapment, pending a decision.



The following Wednesday, a man was brought before the magistrate for interpreting the position of two crows on the statue in the plaza centrale as an omen, and so closing his bakery two hours early. He was punished in the usual manner, whipped until tears were visible from a distance not less than six feet, but as he sat in the stocks, his attempts to swear and condemn the good name of the magistrate, as required by statute, proved futile, and he found that he could only shout the word “Now,” which puzzled the axeman and resulted in a substandard whipping, all present agreed.



That Friday was the Floating Sabbath, and nothing occurred.



On Saturday, a bicycle was seen flying across the courtyard outside the castle. It landed on the street and careened down the sidewalks, terrorizing two women and annoying a man and three dogs. When it finally came to a rest, pursued by a frenzied Guardsman, outside the Bakery of the man whipped on Wednesday, the Guardsman began to cry, mounted the bicycle, and left the City. He was heard from only once more, by picture postcard, lying and wishing that the residents of the City were in whatever sub-standard place he ceased his movements and chose to be. The postcard was passed around the City and scorned by the populace, although two women who lived near the Eastern gate are believed to have felt momentary envy. Although they never corroborated the story, they were seen both to walk down the sidewalks of their neighborhood while holding their arms in uncomfortable poses. The inference is not a difficult one.



Sunday, in spite of the Fixed Sabbath, the King died and was lost in a deep well behind the castle. Six mourners stood around the hole in a somber fashion and did not weep, for he was not a good King. That was almost the end of it.



Instead of choosing a new King, people began moving away. On Monday, we packed our cushions. On Tuesday, we packed our various furniture. On Wednesday, we packed our foodstuffs. On Thursday, the City was deserted.



I do not doubt that it still stands, there, in the precise center of the world, and the universe. Although we all drift aimlessly through the samsara, I have never met another who was thus expelled from the City. I have unpacked my foodstuffs, my various furniture and my cushions. I keep to the old ways, and I suppose that, maybe in this avatar, maybe not, I will meet another, and we will stand in silence and not speak of the City.



mood: slavered
 
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My one-sentence review of "Drive Angry"  
11:04pm 08/08/2011
 
 
Mister Nihil
 Is this secretly a two-hour Chainsawsuit cartoon?
 
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Put On Your Headache Hat 2  
09:06pm 21/07/2011
 
 
Mister Nihil
OK, so, now let's take another look at our friend, the C13b5b9. Here's that same, sad, little tab from before
-5-
-5-
-3-
-x-
-4-
- 2-
And, again, that's the Gb, Db, Bb, E, A voicing.
So, what is an X13b5b9? Well, let's break it down a little. A 13 chord is a dominant type chord. This means it starts with a major triad, and then has a minor 7th (just the note, just an interval) stacked on top. Shall I get a little more basic? Chords are built by taking every other note of a scale and stacking them. If your three-octave scale (in the key of C) goes like this:
C D E F G A B C D E F G A B CD E F G A B C
your chords would be formed from a thing that looks like this, by dropping every other note from the scale:
C _ E _ G _ B _ D _ F _ A _ C _ E _ G _ B
That's got most of the diatonic (in the scale, no accidentals, no extra sharps and flats) chords in the chord scale, by starting on the note in question and taking the next two or three or more notes. Like, to form the diatonic C chord in the key of C, you start on C and move up.
C _ E _ G
That makes a C Major Triad, or, you just keep going:
C _ E _ G _ B _ D _ F
That makes a C Major11. This is because, once you cross the Octave (the 8th note in the scale), you keep counting. So, the triad is the First, Third and Fifth degree, or note, of the scale. The Major 7th is that major triad, with a Major 7th interval on top. From there, you pass the octave, and get the note that was the second, an octave higher, and which has crossed his name off his nametag and is now pretending to be named 9th. The fourth becomes the 11th, and the sixth becomes the 13th. At this point, if you're counting, you have a chord that looks like this:
C _ E _ G _ B _ D _ F _ A
That's all the notes of the scale. If you drop the top half of them down an octave, you're just leaning on the keys of the piano. How could that possibly sound good? Well, if you arrange it more or less as it is there, it's just a C Major triad and a B "half-dimished" 7th (just roll with it) stacked, and it's got a neat, jazzy almost-dischordant quality to it.
So, what's the difference between a Major 7th and a Dominant 7th? They are the same, but you drop the 7th degree by a half step. Then, if you go ahead and count up the scale, you get a thing that looks like this:
C _ E _ G _ Bb _ D _ F _ A
Which is a C triad and a Bb Major 7th chord stacked, which makes a C13. Any place you could use a C7 chord, like, for example, as a diatonic chord in the key of F, you can also toss in a C13.*
Back, now, to our friend, the C13b5b9. The naming convention for chords goes like this: You start with a known chord, like C13, and then you add the stuff that doesn't fit after, like, for example, a b5 and a b9. That means, a C13b5b9, in all its glory, is spelled out like this:
C _ E _ Gb _ Bb _ Db _ F _ A
Now, that's too many notes to actually play (at once) on a (six string) guitar. Taking into account the physical limitations of the instrument, with the physical limitations of the human hand, you have to eliminate some notes, so that you can actually have a chord that you can play. Maybe surprisingly, maybe not, the first thing you often drop from voicings of larger chords, is the root. The hope is that you can either imply it, or that some other kindly member of the band will fill it in. The second choice is usually the 11th degree. There are several reasons, but the short version is, the 11th, which is also the 4th, often adds a kind of strange quality to chords. It's a fun thing to play with, but in a chord with a lot of peculiarities, you have to be careful which ones you include. The third is fairly low on the list of desirable cuts, because that note determines the major or minor quality of the chord. The b5 and b9 are probably best not to cut, if only because if you cut them, you change the basic nature of the chord (a C13b5b9 without its b5 is just a C13b9, and that's a different animal). Also, the b5 and b9 add the diminished quality (the first four notes of the chord are only two half-steps away from being a C diminished 7th chord) that makes the silliness from yesterday possible. The 13 is the note that makes the chord a 13, so, again, best to leave it. If you cut the 11 and the 13, you just have a C7b9b5 or something, and that's scarcely the same!
This leaves a chord that looks like this:
x _ E _ Gb _ Bb _ Dd _ x _ A
-5-
-2-
-3-
-4-
-x-
-0-
Why not just play that? Well, besides being kind of awkward on a guitar, it's frankly not as fun as playing around with inversions. Inversions? Inversions! That means you take those notes, and change the order to make them a)more interesting, b)fit the song better, or c)easier to play, because, let's face it, we're guitarists. We're lazy.
How could it b)fit the song better? Well, there are several ways. If you need a chromatic progression in the bassline, and are moving from an F to a C7, our friend is a fun choice, because the F moves up to the Gb, and the C7 becomes an entirely more fun C13b5b9 (did I mention?). Is that too busy for your song? Then don't use it. This is a special-case kind of chord.
Suppose you have a song with slow changes, say:
F - Gmin - C7 - C7 - F (a fairly standard jazzy progression, with each chord getting one measure)
If you want to make the chords more interesting than just sitting on a single chord, in place of the C7, Try this:
-X-X-x-1-3-5-
-1-3-5-3-1-5-
-3-3-3-3-3-3-
-2-2-2-2-2-x-
-3-2-1-0-x-4-
-X-X-x-x-3-2-
These are all chords that work as C7 chords (specifically, C7-C9/B-C7/Bb-C13-C7/G-C13b5b9), and it has two neat effects. It sets up ascending scale-wise motion on the top, with the highest notes being C, D, E, F, G and A, and it sets up mostly-chromatic motion on the bottom, C-B-Bb-A-G-Gb. It has that great droning E-Bb in the middle, holding the tritone at the center of the chord. The fingerings get a little tricky, but the end result can be worth it. That also puts you in a prime spot to resolve back to that F, with your stepwise motion down to a nice, easy, very standard voicing.
That's one more use for our new friend, the C13b5b9. It makes a neat passing chord when you have to stay on a C7, but you don't want to use just the same old C7.
Enjoy! Or, more likely, don't!


*OK, that's not always true, the opposite only usually is, but for the moment, we'll pretend that all songs could use extra jazz, and that anything that makes them more harmonically interesting will make them better. Again, just roll with it.
 
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Put on your headache hat!  
02:56pm 20/07/2011
 
 
Mister Nihil
Ok. So, the C13b5b9. What is it good for? Let's take a moment, shall we?
I'm specifically referring, at least for the moment, to the voicing for the guitar, beginning with an F#/Gb on the low E string, a C#/Db on the A, a muted D string, a Bb on the G, an E on the B, and an A on the E. If I tabbed it out, it could look like this:
-5-
-5-
-3-
-x-
-4-
-2-
And that, my friends, is a sad little tab.
OK, so let's look at it. First, of course, you will note that the b5 and b9 are in the bass. This makes for a peculiar sound. If you were to look at the notes, F#/Gb, C#Db, Bb, E, and A, (I'm not going to double notate the sharp/flat thing any more. You can imagine that they are what you need them to be) you might note that they also spell out an F#7#9 (that's an F#, 7#9, not an F #7#9). That's among the peculiarities of this fun chord. Depending on context, it can function as either a C13b5b9 or an F#7#9. Now, perhaps you also suddenly had an aha! moment and realized that these two are a tritone apart, and that with a tritone substitution, they have very similar functions. See? It's getting more interesting all the time.
Now, suppose you decide you don't like this chord and voicing, which I guess is more accurately called a C13b5b9/Gb, as well as I seem to. So, you decide to run the thing up the fretboard until there's a proper, self-respecting C in the bass. That seems pretty understandable, right? Then, you'd get this:
-11-
-11-
-9-
-x-
-10-
-8- (the same chord shape, 6 frets higher)
So, see, by running the chord up the fretboard until you get a nice, comfortable C in the bass, you've moved it up six frets, which is our friend the tritone. What does this mean? It means that by running it up to there, you have the same shape, higher, and it's still also an F#7 type chord, only now the two chords have switched. This is now a C7#9 and an F#13b5b9. Neat, right, but what, besides just jumping from one to the other and saying "neat, right?" is it good for?
Well, it has a couple of uses.
The same way you can use an F# dimished7 in place of a boring old C7, with our good pal the tritone substitution (and trust me, you can), you can slap in a C13b5B9, which gives the interesting tonality of a straight substitution, and the potential for a chromatic walkup (from F/tonic) in the bass. The same goes for the C# diminished and the F#, only a tritone higher, or not, depending.
Depending?
Yeah, see, that's the beauty of it. You can use either placement of the voicing, low or high, and it's still existing in this fragile middle ground place, between being a full-on 7th and some kind of peculiar diminished. It's still being both an F# diminished and a C7 and a C diminished an F#7. This isn't actually because of any magic with this chord, it's our old friend again, the tritone. This just happens to be an interesting voicing of this chord.
OK, but what's it good for?
Sounding cool. That's always job one. What else? Well, if you want to look a little closer, it can stand in as a dominant chord, anywhere your progression (in the key of F, in this case) asks for a V7, but your sensibilities want something that isn't boring. It can be a slightly off-kilter ii, which can create fun peculiarities if you were to, say, use the lower voicing (the first one) as the ii, and then run it up to the higher (second) voicing as the V7. I dunno. I always think it's neat to use the same chord for two functions in a harmonic line, but then, I'm kind of a nerd. So, if you were going to do that, you'd maybe play the first chord above, then the second, and then either a plain old F, or some kind of Super Awesome F7 device. Or, if you wanted a really pretty thing, maybe an F6/9, which I will tab out below so you can resolve this fun semi-dischordant play-around, if you must.
-8-
-8-
-7-
-7-
-8-
-x-
Enjoy! Or, more likely, don't!
 
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