View attached explanation and answer. Let me know if you have any questions.
Business Law Question
1. Jackson Corp. has an authorized capital stock of 1,000 shares with a par value of $100
per share, of which 900 shares, all fully paid, were outstanding. Having an ample surplus,
Jackson Corp. purchased from its shareholders 100 shares at par. Subsequently, Jackson,
needing additional working capital, issued the 200 shares in question to Murphy at $80 per
share. Two years later, Jackson Corp. was forced into bankruptcy. How much, if any, may
the trustee in bankruptcy recover from Murphy? Please explain.
When a bankruptcy happens, the trustee may be restricted from recovering the sale of the 100
shares. However, the trustee is allowed to recover the $2,000 from Murphy that covers that 100
previously unissued shares. The remaining 900 shares were paid in full. When the organization
purchased the 100 shares at par for $100 it was solvent and had a surplus. The 100 shares
purchased are converted into treasury shares (Guerard et al. 2021). The shares can eb disposed if
by corporation or fixed with the board of directors. Jackson Corp. on the other hand hold the
selling right of 10…
15 Million Students Helped!
Create Account to order
