Fiduciary Duty- loyatly- corporate opportunities

Question 1

duty ofcorp. officer director.. is duty of loyalty to:

Answer 1

put the interest of the entity ahead of your own (when dealing with a third party)

Question 2

board gets to make decisions on

Answer 2

behalf of the corporation

Question 3

board loses authority when there is

Answer 3

taint

Question 4

taint when:

Answer 4

conflict of interest; puppet- being manipulated

Question 5

self dealing transaction ok if:

Answer 5

disinterested directors make decisions (bjr)

Question 6

if interested director part of decision in self dealing transaction use:

Answer 6

entire fairness standard (judge decides)

Question 7

in usurping corporate opps what duty is owed

Answer 7

duty of the finest loyalty

Question 8

many forms of conduct are ok if conducted at arms length transaction but trustees

Answer 8

held to a higher standard

Question 9

trustee std.

Answer 9

more than the morals of the marketplace; to the punctilio of an honor the most sensitive

Question 10

rule of undivided loaylty is

Answer 10

relentless and supreme

Question 11

cardoza says you have duty even when

Answer 11

partnership is wrapping up

Question 12

broad continuum

Answer 12

1. Putting others interest above your own
2. telling someone your going to stab them in the back.
3. stabbing someone in the back.

Question 13

if non-immunized corp opp look to

Answer 13

entirely fair std.

Question 14

Basic rule under entirely fair std may not take bus opp for own if :

Answer 14

1. Corp is financially able to exploit the opp
2. The opp is within the corps line of bus.
3. The crop has an interest or expectancy in the opp AND
4. By taking the opp the fiduciary will thereby be placed in a position inimical to his duties to the corp.

Question 15

entire fair std may take bus opp if :

Answer 15

1. Opp is presented to the director in his individual and not his corporate capacity
2. The opp is not essential to the corp
3. The corp holds no interest or expectancy in the opportunity AND
4. The director or officer has not wrongfully employed the resources of the corporation in pursuing or exploiting the opportunity

Question 16

golden rule

Answer 16

immunized in advance

Question 17

approval of directors

Answer 17

a. All material facts as to relationship and interests in contract of transactions disclosed or known.
b. Board of committee in good faith authorizes the contract or transaction by affirmative vote of majority of disinterested directors.

Question 18

approval by shareholders

Answer 18

a. Disclosed or are known shareholders entitled to vote thereon
b. Contract or transaction is specifically approved in good faith by disinterested

Question 19

aproval by court

Answer 19

a. The K or transaction is fair as to the corporation at the time it is authorized, approved, or ratified, by the board of directors, a committee, or the shareholders.

Question 20

sanitizing measures for directors

Answer 20

a. Approval after the fact by a majority vote of disinterested shareholders

Question 21

sanitizing measures for officers

Answer 21

a. Approval after the fact by the Board or a majority vote of disinterested shareholders.

Question 22

sanitizing measures for other employees

Answer 22

a. Approval after the fact by designated supervisors.