500 MPRE PRACTICE QUESTIONS AND ANSWERS

1. Conglomerate Corporation owns a little more than half the stock of Giant Company. Conglomerate's stock, in turn, is public, available on the public stock exchange, as is the remainder of the stock in Giant Company. The president of Conglomerate Corporation has asked Attorney Stevenson to represent Giant Company in a deal by which Giant would make a proposed transfer of certain real property to Conglomerate Corporation. The property in question is unusual because it contains an underground particle collider used for scientific research, but also valuable farmland on the surface, as well as some valuable mineral rights in another part of the parcel. These factors make the property value difficult to assess by reference to the general real-estate market, which means it is difficult for anyone to determine the fairness of the transfer price in the proposed deal. Would it be proper for Attorney Stevenson to facilitate - Answer-d) No, not unless the attorney first obtains effective informed consent of the management of Giant Company, as well as that of Conglomerate, because the ownership of Conglomerate and Giant is not identical, and their interests materially differ in the proposed transaction. RESTATEMENT § 131 2. Mr. Burns, the chief executive officer of Conglomerate Corporation, now faces criminal charges of discussing prices with the president of a competing firm. If found guilty, both Mr. Burns and Conglomerate Corporation will be subject to civil and criminal penalties under state and federal antitrust laws. An attorney has been representing Conglomerate Corporation. She has conducted a thorough investigation of the matter, and she has personally concluded that no such pricing discussions occurred. Both Conglomerate Corporation and Mr. Burns plan to defend on that ground. Mr. Burns has asked the attorney to represent him, as well as Conglomerate Corporation, in the proceedings. The legal and factual defenses of Conglomerate Corporation and Mr. Burns seem completely consistent at the outset of the matter. Would the attorney need to obtain informed consent to a conflict of interest from both Mr. Burns and a separate corp - Answer-a) Yes, the likelihood of conflicting positions in such matters as plea bargaining requires the attorney to obtain the informed consent of both clients before proceeding with the representation. RESTATEMENT § 131