Capital structure - Corporate law on dividend policy

Question 1

Courts will not interfere with a business decision made by directors of a business unless there is a claim of _____, ___ _____, or ____-_______.

Answer 1

Courts will not interfere with a business decision made by directors of a business unless there is a claim of FRAUD, BAD FAITH, or SELF-DEALING.

Question 2

Can a stockholder maintain a claim against the directors of a corporation if the stockholder alleges only that a particular course of action would have been more advantageous than the course of action the directors took?

Answer 2

No. Courts will not interfere with a business decision made by directors of a business unless there is a claim of fraud, bad faith, or self-dealing. An error of judgment by directors, as long as the business decision was made in good faith, is not sufficient to maintain a claim against them.

Question 3

Is an error of judgment by directors, as long as the business decision was made in good faith, sufficient to maintain a claim against them?

Answer 3

No. An error of judgment by directors, as long as the business decision was made in good faith, is not sufficient to maintain a claim against them.