Gimble Hardt Corporation (GHC) is a manufacturer of aluminum wiring. Jason Gimble owns 82 percent…

Gimble Hardt Corporation (GHC) is a manufacturer of aluminum wiring. Jason Gimble owns 82 percent of the 2 million outstanding shares of GHC. The remaining 360,000 shares are owned by 832 minority shareholders, none of whom owns more than 1,200 shares. Gimble wants to freeze out the minority shareholders using a reverse share split. Describe that procedure, including a statement of who must approve the transaction. What legal standard must the freeze-out transaction meet? Does it matter that Gimble wants to freeze out the minority shareholders so that GHC is no longer a public company that has to comply with the costly rules of the Sarbanes– Oxley Act?

 

 

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