Which of the Following Was the Result on Appeal in In Re

question 31

Multiple Choice

Which of the following was the result on appeal in In re Abbott Laboratories Derivative Shareholders Litigation,the case in the text alleging corporate directors' breach of the duty of good faith through their failure to follow up on repeated notices of regulatory noncompliance?

• A) That the directors were not liable and did not breach any duty of good faith because they were unaware of the issues, and accepted corporate governance procedures did not require the disclosure of the noncompliance notices to them.
• B) That the directors could not be held liable because the corporation's certificate of incorporation exempted directors from liability for breach of the duty of care.
• C) That the business judgment rule applied and that the plaintiffs' allegations could not withstand the protection of that rule.
• D) That the plaintiffs sufficiently pleaded allegations that, if true, constituted a breach of the duty of good faith leading to the directors' actions falling outside the protection of the business judgment rule.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle if longer.

Current Liabilities

Obligations that a company is required to pay within the next year or within its operating cycle if longer.

Summary of Significant Accounting Policies

A section in an entity's financial statements that describes the significant accounting policies used in the preparation of those statements.

Revenue Recognition Policies

Guidelines that determine the specific conditions under which revenue is recognized as earned and can be reported in financial statements.