Commercial Law, 2019 Bar — Question A.3-a

ESSAY

In June 2018, DEF Corp. sent notices to its stockholders informing them of the corporation's issuances of new shares of stock. The notice included a reminder that, pursuant to DEF Corp.'s Articles of Incorporation, any stockholder who fails to exercise his or her pre-emptive right within three (3) weeks from receipt of notice would be considered to have waived the same. Ms. Z, a stockholder of DEF Corp., failed to exercise her pre-emptive right within the said period. However, she claimed that she did not validly waive her right to do so because a waiver must be expressed in writing. (a) Explain the concept of pre-emptive right under the Corporation Code.

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