Wednesday, October 11, 2017

UBE Essentials: Corporations & LLCs

Attached is a sample page from the chapter on Corporations and LLCs from my book UBE Essentials.  UBE Essentials contains chapters on every subject tested on the UBE and is available on Amazon @

Wednesday, October 4, 2017

An Approach to Answering MBE Questions

I wrote a post for the Bar Exam Toolbox outlining my approach to answering MBE questions.  Hope you'll find it helpful!  Read more @

Tuesday, September 26, 2017

MBE Percentiles (July 2017)

As they do each administration, the Illinois Bar Examiners have released nationwide MBE percentiles for the July 2017 exam.  My thoughts on the numbers:

The data we don't have is the number of points that any given raw score was scaled up to achieve any given scaled score.   Looking at the data, a 140 scaled score would place in you in the 47th percentile in July 2017. In comparison, a 140 scaled score would have placed you in the 69th percentile on the February 2017 exam.  This indicates that on average students scored higher in July 2017 than in February 2017 since the same scaled score places you in a lower percentile in July.

Some other points to note: A 145 scaled score would place you in the 58th percentile, a 150 the 68th percentile, and a 155 the 78th percentile. The 90th percentile requires somewhere between a 160-165 scaled score. The top percentile listed (99th) required a 175 scaled score and the lowest percentile (1st) was a scaled score of 105.

Friday, September 22, 2017

Shareholders' Lawsuits

Lots of people struggle with the subjects that fall under the category of "business associations."  Corporations is one of those subjects and it's tested frequently on the Multistate Essay Exam.  A large number of the questions dealing with corporations include issues regarding shareholders, and this post will address one of those issues.

Direct Actions by a Shareholder:

There are times in which a shareholder might feel that a fiduciary duty was breached by either a director or an officer of the corporation and that the shareholder is affected directly by the breach.  The shareholder (rather than the corporation itself) is affected directly if the shareholder suffers the most immediate and direct damage and if the defendant's duty of care ran directly to the shareholder rather than to the corporation. If a shareholder sues in such a situation that is known as a direct action by the shareholder, and considerations are important because in a direct action by the shareholder, recovery is for the benefit of the individual shareholder and not the corporation.

Derivative Actions by a Shareholder:

I see derivative actions tested a bit more frequently than direct actions.  In a derivative action, the shareholder is asserting the corporation's rights (rather than the rights of the individual shareholder).  Recovery here generally goes to the corporation rather than to the shareholder, and yet interestingly the corporation is still named as the defendant.  There is a process here to keep in mind if a shareholder is to bring a derivative action.

The shareholder must have been a shareholder at the time of the act or omission complained of or must have become a shareholder through transfer by operation of law from one who was a shareholder at that time. In addition, the shareholder must adequately and fairly represent the interests of the corporation.  Assuming these requirements are satisfied, the shareholder must make a written demand on the corporation to take suitable action and the derivative proceeding may not be commenced until 90 days have elapsed from the date of that demand.  The 90-day requirement will not be enforced, however, if the shareholder has been notified that the corporation has rejected the demand or if irreparable injury to the corporation would result if required to wait 90 days.

If a majority of directors (at least 2) who have no personal interest in the controversy find in good faith after reasonable inquiry that the suit is not in the best interest of the corporation, then the suit may be dismissed on motion by the corporation.  To avoid such dismissal, the shareholder will have the burden to prove that the decision was not made in good faith after reasonable inquiry.  The burden will shift to the corporation, however, if it's not true that a majority of directors had no personal interest in the controversy.  In that case, the corporation will have the burden to prove that the decision was made in good faith after reasonable inquiry.

Once the derivative action has ended, the court may order the corporation to pay the plaintiff's reasonable expenses if it finds that the action has resulted in a substantial benefit to the corporation. If, however, the court finds that the action was maintained without reasonable cause, the court may order the plaintiff to pay reasonable expenses to the defendant.

Monday, September 18, 2017

July 2017 Florida Bar Exam

Some data by school for passage rates on the July 2017 Florida Bar Exam:

Thursday, September 14, 2017


Some of the most difficult questions within the subject of Criminal Law are found within the topic of inchoate offenses.  Within these offenses are the following crimes: solicitation, conspiracy, and attempt.

Like most aspects of Criminal Law, the elements will guide the analysis.  The following are the aspects of solicitation that often pop up in the questions and therefore should be known well:

Solicitation requires that a person incite, counsel, advise, urge, or command another to commit a crime with the intent that the person solicited commit the crime.  The fact that the person must intend that the other commit the crime makes this a specific-intent crime.  Importantly, it is not required that the person solicited actually respond affirmatively and commit the crime.  So, for example, if x commands y to commit a crime and x intends for y to actually commit that crime, the fact that y denies x's command has no bearing on the analysis as to whether x has committed the crime of solicitation; the crime is in the command itself.

It is also not a defense that the person solicited is not convicted of the offense solicited, nor is it a defense that the offense solicited could not in fact have been successful.  Withdrawal is always worth considering in Criminal Law, and with solicitation most jurisdictions have held that withdrawal is not a defense.   One important defense to note, however, is a situation in which the solicitor could not have been found guilty of the completed crime because of a legislative intent to exempt the solicitor.  For example, a minor female cannot be guilty of solicitation for the crime of statutory rape by urging an adult male to have intercourse with her because the legislative intent is to not find the minor guilty of statutory rape in such a situation once the crime is completed.

Let's assume that the person solicited actually completes the solicited crime. In such an instance both the person solicited and the solicitor can be held liable for that completed crime.  Similarly, if the person solicited commits acts which would qualify for the crime of attempt, both the person solicited and the solicitor can be liable for attempt. And finally if the person solicited agrees with the solicitor to commit a crime but then chooses not to commit it, don't forget that both the solicitor and the person solicited might be liable for conspiracy. In all of these circumstances, though, the solicitor will not be liable both for the solicitation and the completed crime.  The crime will merge with the solicitation so that the solicitor will be liable either for the solicitation or the completed crime but not for both.

***Note: Although the default rules on the MBE require a knowledge of the common law, its important to note that under the Model Penal Code one can renounce (i.e., withdraw from) the solicitation if the solicitor prevents the commission of the crime such as by persuading the person solicited not to commit the crime.

Tuesday, September 12, 2017

MBE Scores Slightly Up

The national average score on the July 2017 Multistate Bar Exam rose 1.4 points over the July 2016 average.

Thursday, August 31, 2017

Automatic and Temporary Perfection of a Security Interest

To review, there are 5 ways to perfect a security interest as per the rules in Article 9 of the UCC.  The previous 2 posts have discussed 3 of those ways (filing, possession, and control), and this post will discuss the remaining 2, automatic perfection, and temporary perfection.

Automatic Perfection:  The rules you'll need to know about automatic perfection are very limited.  Only a purchase money security interest ("PMSI") in consumer goods is automatically perfected.  A seller of goods has a PMSI when the security interest is retained to secure at least part of the purchase price of the goods.  So, if a seller of consumer goods lends money to the buyer and retains a security interest to secure that loan (i.e., ensure repayment) then that security interest will be automatically perfected with no further action required to perfect it.  It's important to note that not all PMSI's are eligible for automatic perfection.  If the PMSI is in inventory or equipment, for example, then you should not apply the rule regarding automatic perfection; it should only be applied to consumer goods.  In addition, there is an exception for motor vehicles to keep in mind:  a security interest in motor vehicles can be perfected only by notation on the vehicle's certificate of title.

Temporary Perfection:  The first place to begin when discussing temporary perfection of a security interest is with proceeds.  A security interest in proceeds from original collateral is continuously perfected for 20 days from the debtor's receipt of the proceeds.  This is automatic perfection but the security interest will become unperfected after 20 days unless the statutory requirements are followed.  The security interest, however, will continue beyond the 20 days if:

(1): The security interest in the original collateral was perfected by filing a financing statement, a security interest in the type of collateral constituting the proceeds would be filed in the same place as the financing statement for the original collateral, and the proceeds were not purchased with cash proceeds of the collateral.


(2): The proceeds are identifiable cash proceeds.


(3): The security interest in the proceeds is perfected within the 20-day temporary perfection period.

In addition to proceeds, there are a few other types of security interests eligible for 20-day temporary automatic perfection.  The first deals with instruments, negotiable documents, and certificated securities.  Where new value is given under an authenticated security agreement for instruments, negotiable documents, or certificated securities, perfection is valid for 20 days after attachment; nothing further is required to perfect temporarily.

In addition, where a creditor has perfected a security interest by possession and delivers to the debtor instruments, negotiable documents, certificated securities, or goods in the possession of a bailee, perfection will continue for 20 days after which the creditor must re-perfect (since the creditor no longer has possession).

An example here might be helpful:  Assume that the creditor possesses a promissory note as collateral for a loan given by the creditor to the debtor.  The note has been perfected by possession but at some point the creditor must give the note to the debtor so that the debtor can present it for payment.  Perfection of the security interest will not be lost on that note the moment that the creditor stops possessing it, but the creditor will need to perfect (for example file or re-possess) the note within those 20 days or else lose perfection.

Thursday, August 24, 2017

Perfection of a Security Interest by Possession or Control

In the last post I discussed how one might perfect a security interest by filing a security agreement.  There are 5 ways in total to perfect a security interest, and this post will be focus on 2 of the remaining 5, possession and control.


Security interests in most types of collateral can be perfected by possession.  There are some types of collateral, however, that cannot be perfected by possession and they should be kept in mind.  The types of collateral that cannot be perfected by possession are general intangibles, non-consumer deposit accounts, non-negotiable documents, electronic chattel paper, certificate of title goods, and accounts.  In other words, to perfect a security interest in these types of collateral will require perfecting by a method other than possessing the collateral.

If perfecting by possession, the security interest will be perfected from the moment of possession and will continue as long as possession is retained.  When the collateral is being possessed by a bailee, possession will begin the moment a bailee authenticates a record acknowledging that it is holding the collateral for the benefit of the secured party.


As with possession, there are certain types of collateral that can be perfected by control, and here they are rather limited. They are non-consumer deposit accounts, electronic chattel paper, and investment property. Regarding non-consumer deposit accounts, a bank in which a non-consumer deposit account is maintained will automatically have control over the deposit account.  If the secured party is not such a bank, it may obtain control over a non-consumer deposit account by putting the deposit account in the secured party's name or by agreeing in an authenticated record with the debtor and the bank in which the deposit account is maintained that the bank will comply with the secured party's orders regarding the deposit account without requiring the debtor's consent.

As to electronic chattel paper (chattel paper stored in an electronic medium such as a computer), it is controlled when a system is put in place to show the transfer of interests in the chattel paper which reliably establishes the secured party as the assignee.

And finally, there is investment property.   One can gain control over a certificated security (such as a stock or bond represented by a certificate) by taking possession of the certificate if it is in bearer form.  If, however, the certificate is in registered form, the secured party must take possession and the certificate must be indorsed to the secured party or registered by the issuer in the name of the secured party.

If the investment property is a securities account rather than a certificated security, then one will obtain control over that account if the owner of the account instructs the securities intermediary that the secured party has the same rights in the account as the owner or if the owner instructs the intermediary that the intermediary may comply with the secured party's orders without the owner's further consent.

Monday, August 14, 2017

Perfection of a Security Interest by Filing

Once a security interest has attached, it's then important to determine whether the requirements for perfecting that security interest have been satisfied.  By perfecting the interest a party will have priority over most other third parties (though well known by anyone who has studied this subject, there are exceptions).

There are five ways to perfect a security interest. Throughout the next five posts I'll be reviewing each in detail.  If an essay question shows up on the bar exam testing secured transactions, the probability is quite high that an issue dealing with perfection will be included. 

The five methods to perfect a security interest are as follows:

(1): Filing
(2): Taking possession of the collateral
(3): Control
(4): Automatic perfection
(5): Temporary perfection

To file a security interest requires filing a financing statement which can be filed either electronically or in writing.  The financing statement must contain the debtor's name and mailing address, the secured party's name and mailing address, an indication of the collateral covered by the financing statement and if the financing statement covers real-property-related collateral a description of the real property, the name of the record owner, and an indication that it is to be filed in the real property records. 

A minor error in the debtor's name will not invalidate a financing statement but seriously misleading errors will. If the debtor's name becomes insufficient and therefore seriously misleading (because, for example, the debtor changes his/her name) then the financing statement will only be effective against collateral acquired by the debtor before the name became insufficient and within 4 months after.  After that point, the secured party must re-file using the debtor's correct name. 

If the filing office chooses to accept a financing statement that does not contain the debtor's address, the statement is effective despite the lack of address.  The financing statement must indicate the type of collateral covered by the statement but it may do so broadly (for example "equipment").  It may even include a "supergeneric" description such as "all assets."

The debtor must authorize the financing statement in an authenticated record either before or after it is filed.  Filing should be done centrally in the office of the secretary of state.  One exception to the place of filing deals with filing for security interests in timber to be cut, minerals and fixtures. Those interests should be filed locally in the county where a mortgage on real estate is filed. 

Filing is valid for 5 years.  A continuation statement may be filed which will extend this 5 year period for another 5 years but may only be filed within 6 moths before the lapse of the first 5 year period.  

Next up will be a post on another method for perfecting a security interest: taking control of the collateral.

And, yes, I know that is the worst cliffhanger ever. :) 

Thursday, August 3, 2017

Bar Exam Tutoring

It seems to me that students are beginning earlier than ever in their preparation for the bar exam. I've said for quite some time that the longer one prepares, the less stressful the process. The bar exam is difficult for a variety of reasons but it is my opinion that what makes it especially difficult is the amount of material required relative to the amount of time that one generally has to learn that material. Increase your preparation time and the task becomes less daunting; when the task becomes less daunting the chances of passing the exam increase. You can very much set yourself up for success on the exam by approaching it in the correct way.

I'm often asked what options I offer to students who are interested in receiving personalized assistance with their preparation for the exam.   This too has become more common; about a decade ago it was relatively rare to prepare in any way other than with the traditional method of taking a large bar-review class. 

For sure, one-on-one tutoring provides very specific benefits and does not entirely supplement all that one receives in a full bar-review course. But it can certainly complement it, and it has the potential to provide for very quick and effective progress since weaknesses can quickly be targeted and improved upon.  People are now approaching the bar exam as they approached other tests they've been required to take such as the LSAT, SAT, ACT, etc.  

I offer quite a few different options for students who are interested in working with a bar exam tutor. When students e-mail me I provide them with much initial information. If then interested in learning more, we chat on the phone so that I can describe the tutoring in even more detail and so that I can answer any questions that you have about the process

Feel free to reach out to to learn more about the tutoring options!

Saturday, July 22, 2017

Good Luck!

I'm sure many can relate to this.  Good luck next week, and posting to resume shortly to assist those preparing for the February 2018 exam!

Friday, July 21, 2017

Service of Process (Out-of-State Defendants)

A recurring question has been coming up with my tutoring students over the last week, so I thought it a good idea to address it on the blog.  It deals with the federal rules for service of process of out-of-state defendants and the rule can definitely be a bit complex.

The rule regarding service of process to a party (an individual) served in the same state in which the court sits is straight-foward enough:  any person who is 18 years old and not a party to the action may serve process at the defendant's usual place of abode with one of suitable age and discretion who resides there.  In addition, service may be upon an authorized agent of the defendant. There are slightly different rules if dealing with an organization (for example, a corporation), a minor, etc.

But the rules change when the person to be served is outside of the state in which the federal court sits.  First look to the long-arm statute of the state in which the federal court sits. The long-arm statute might guide as to the rules regarding serving a person out of state.  In addition, there is a specific rule for serving third-party defendants (impleader, rule 14), and indispensable parties (rule 19).  The rules provide that third-party defendants or parties required to be joined may be served if served within 100 miles from the place where the action is pending.  This is sometimes referred to as the "bulge provision."

Finally, out-of-state service may be permitted if permitted by federal statute and for cases that involve a federal question (only a federal question, so this provision does not apply to cases that are in federal court based on diversity) if a defendant is served with process and is not subject to general jurisdiction in any state, provided that the defendant also has sufficient contacts with the United States and that jurisdiction is not prohibited by statute.

Worth keeping in mind as we approach the July exam.....