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Duty of loyalty

Duty of loyalty - Corp opportunity is Does corp have...

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Duty of loyalty: Is there a conflict of interest? Burden is on plaintiff to tell If yes sec 144a must be clensed (majority of independent board members approve or in addition, ratification by shareholders) must be informed. If not proper clensing, must be intrinsic fairness Cinerama shows elements. Burden is on defendant to show. If fair, get business judgment protections if not action is voidable. Is it a corporate opportunity? If yes, go to clensing aspect of 144 does fiduciary disclose to the company? If yes, did the corp properly reject. If yes then no breach. If corp doesn’t properly reject, does fiduciary take opportunity? If he does, then there is a breach. If fiduciary doesn’t disclose all material facts and he takes the opportunity, then breach.
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Unformatted text preview: Corp opportunity is Does corp have interest (if firm has preexisting contrct right to it) or a expectancy (if corp while not contractually entitled to it it is reasonable expectation to receive it) or necessity (if it refers to goods that corp needs to stay in business.). Line of business case (in corp line of business where corp is engaged in certain business consanent w/ ) this is the deleware test. Opportunity presented to corporatioin and has financial position component. All are necessary. Fairness test not used in many jurisdictions = case by case opportunity is corp if the fiduciary did not act fairly and equitably. Hybrid tests some states get interest expectancy with line of business. Others may do lien of business and fairness....
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