a(n. _____ is a situation where directors of two different companies serve jointly on the board of a third company.
A) sequestration course
B) indirect interlock
C) preemptive action
D) derivative action
E) nonderivative action

Question

Quizplus · Accepted Answer

An indirect interlock occurs when directors of two different companies serve jointly on the board of a third company. Option A, sequestration course refers to a legal process of separating a debtor's assets to protect them from creditors. Option C, preemptive action refers to the action taken to prevent something from happening. Option D, derivative action is a lawsuit brought by a shareholder on behalf of the company against a third party, while option E, nonderivative action is a lawsuit brought by a shareholder against the company itself.

A(n _____ Is a Situation Where Directors of Two Different