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 this property transfer at the behest of the president of Conglomerate, if Attorney Stevenson would be representing Giant as the client in this specific matter? a) Yes, because Conglomerate Corporation owns more than half of Giant Company, so the two corporate entities are one client for purposes of the rules regarding conflicts of interest. b) Yes, because the virtual impossibility of obtaining an appraisal of the fair market value of the property means that the lawyer does not have actual knowledge that the deal is unfair to either party. c) No, because the attorney would be unable to inform either client fully about whether the proposed transfer price would be in their best interest. 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. - 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 c