Contracts usually contain the following:

James Fisk recently acquired Valiant Corporation by purchasing all of its outstanding stock pursuant to a tender offer. Fisk demanded and obtained the resignation of the existing board of directors and replaced it with his own slate of nominees. Under these circumstances,

A. Fisk had no right to demand the resignation of the existing board members; their resignations are legally ineffective, and they remain as directors. B. If Valiant is listed on a national stock exchange, Fisk must file his tender offer with the SEC. C. The former shareholders of Valiant are parties to a tax-free reorganization. Hence, they are not subject to federal income tax on their gain, if any, on transferring their stock to Fisk. D. If Valiant is engaged in interstate commerce, the acquisition is exempt under the antitrust laws because the SEC has jurisdiction.

Contracts based on illegal consideration are valid

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