Non-MBE Subjects

Question 1

The BJR rule statement

Answer 1

The business judgment rule is a presumption that a director’s decision may not be challenged if the director (i) acted in good faith, (ii) with the care that an ordinary prudent person would exercise in a like position, (iii) in a manner the director reasonably believe to be in the best interest of the corporation

Question 2

A transaction cannot be set aside merely because a director had a personal interest in the transaction if:

Answer 2

(i) the director disclosed the material facts of the transaction to disinterested members of the board (or SHs) who approved the transaction, or (ii) the transaction was fair to the corporation.

Question 3

Liability cannot be eliminated under an exculpatory provision for directors of a corporation if

Answer 3

(i) the director received a benefit to which he was not entitled, (ii) intentionally inflicted harm on the corporation, (iii) approved unlawful distributions, (iv) intentionally committed a crime