A Short and Happy Guide to Business Organizations by David Epstein

Author:David Epstein
Language: eng
Format: epub
ISBN: 9781634605830
Publisher: West Academic
Published: 2016-01-15T00:00:00+00:00

10. What Facts Suggest That a Director Has Breached Her Duty of Loyalty to the Corporation?

Look for a fact pattern in which a director uses her position as a director to gain some individual monetary gain or other personal advantage. More specifically, watch for either (1) the director’s usurping a “corporate opportunity” [e.g., BBC, a corporation, owns and operates a restaurant that needs to expand. S, the owner of 124

land adjacent to the restaurant, contacts D because D is a director of BBC and offers to sell BBC the land that is adjacent to BBC’s restaurant. D buys the land for her real estate development company, D Realty Inc., without ever mentioning the opportunity to BBC’s other directors] or (2) the corporation’s entering into an “interested director transaction” [e.g., BBC corporation buys land from D Realty, Inc., a corporation owned by one of its directors at an above market price] or (3) (much less likely) a director’s competing with the corporation [e.g., D, a director of the BBC corporation, opens her own restaurant in the same neighborhood as BBC’s restaurant].

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