Asked by Marisa Mckay on Jun 20, 2024
Verified
Bob is on the board of directors of both Acme Corporation and Beta Corporation.Acme recently acquired Teen Co. ,a retailer of teen girls' clothing.Beta Corporation previously acquired Limitless Co. ,another retailer of teen girls' clothing.Except the teen girls' clothing business,Acme and Beta do not have any other competing businesses.Under the Antitrust Amendments of 1990:
A) Bob must resign from the board of directors of both Acme and Beta.
B) Bob must resign from the board of directors of Acme.
C) Bob need not resign from either board of directors if the teen girls' clothing business contributes minimally to either organization's sales.
D) Bob need not resign until a competitor of Limitless and Teen Co.successfully challenges Acme's acquisition.
Clayton Act
A piece of antitrust legislation in the United States, passed in 1914, aimed at promoting competition among businesses by prohibiting certain practices that restrict competition.
Antitrust Amendments
Modifications made to laws that regulate competition among businesses, intended to prevent monopolies and promote fair competition.
Retailer
A business or person that sells goods directly to consumers, acting as the final link in the distribution chain from manufacturers to end users.
- Clarify the significance and ramifications of interlocking boards of directors in relation to antitrust statutes.
Verified Answer
KR
Kelsey RichmanJun 20, 2024
Final Answer :
C
Explanation :
The Antitrust Amendments Act of 1990 specified that individuals may serve as officers or directors of competing corporations when the "competitive overlap" between them is an insignificant part of either company's total sales.Therefore,Bob need not resign from the board of directors of either Acme or Beta if the teen girls' clothing business (the "competitive overlap" between Acme and Beta)contributes minimally to either organization's sales.
Learning Objectives
- Clarify the significance and ramifications of interlocking boards of directors in relation to antitrust statutes.