NY BAR REVIEW BUSINESS RLTSHP 3 Flashcards
interested director transaction
between corp. and director
or
corp. and entity in which director is director or officer or has substl financial interest
centuries ago, who was tainted, void, voidable - by the corp.
interested director
business corporations law sec 713
when an interested director transaction can be voided
material facts of the transaction of an interested director MUST be what?
disclosed or known to those who are voting
vote of board is sufficient without counting vote of interested directors
first material fact
unanimous vote of disinterested directors is needed to reach a QUORUM
second material fact
shareholder approval
third material fact
failure to reach a required vote
corp. may void the transaction unless parties establish was fair and reasonable to corp. at time of approval
approval
doesnt automatically validate the transaction
transactions with interested director
may be subject to close court scrutiny
interested director considerations
- did he/she satisfy fiduciary duties to corp.
- acted in good faith and loyalty
- fully disclosed terms with the board
- was transaction fair to corp.
bus corp. law sec 714
loan to officers
lend money or guarantee money to officer/director IF
approved by shareholders where quorum, majority of shares entitled to vote, not counting shares owned by director who’s seeking loan/guarantee
corp.’s formed after 2.22.98 (and other corp.’s where designated in their bylaws), re loans/guarantees
can be approved by board after finding that benefits the corp.
dissipation/improper transfer of assets, suits ag. director/officer for misconduct - liability?
directors are jointly and severally liable to corp./creditor/shareholder if vote for/concur in:
- declaration of dividend or other distribution purchased by corp. of own shares contrary to bus corp. law / cert of incorp.
- distribution of assets after co. dissolved, without adequately providing for known liabilities
- making of a loan to a director contrary to bus corp. law
director doesnt need to benefit personally in order to be ________?
liable
director presumed to have ________ in an action, unless expressly ______.
concur
dissent