What Was the Result in Smith V

question 32

Multiple Choice

What was the result in Smith v.Van Gorkom,the case in the text in which it was alleged that directors were grossly negligent in failing to inform themselves adequately before making a decision about a merger?

• A) That the board failed to obtain adequate information on merger terms and would not be protected by the business judgment rule.
• B) That the board was protected by the business judgment rule because there was no conflict of interest.
• C) That the board was not protected by the business judgment rule but was protected by the merger business rule.
• D) That the board was protected by the business judgment rule because fraud could not be established.

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Definitions:

Instinctive Drift

The tendency of an animal to revert to instinctive behaviors that interfere with a conditioned response.

Innate Response

A built-in reaction to stimuli that an organism is genetically programmed to exhibit, also known as an instinct.

Conditioning Process

The method by which organisms learn to associate different stimuli and behaviors through reinforcement or punishment.

Instinctive Drift

The tendency for animals to revert to instinctual behaviors even after learning new behaviors that contradict those instincts.