In the Case Opener, a Majority Shareholder Voted to Award

question 44

Multiple Choice

In the Case Opener, a majority shareholder voted to award a bonus to her son, the president of the company, over the objection of minority shareholders. Which of the following was the result on appeal?

• A) That in awarding the bonus, the majority shareholder violated the duty of loyalty she owed to the company.
• B) That in awarding the bonus, the majority shareholder violated the duty of care she owed to the company.
• C) That in awarding the bonus, the majority shareholder violated the business judgment rule.
• D) That the majority shareholder was guilty of no violation in awarding the bonus.
• E) That the majority shareholder's vote to award the bonus would be upheld only if she submitted additional proof that the bonus was deserved.

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Definitions:

Insulate

To protect something from heat, electricity, or sound by surrounding it with a material that reduces or prevents the transmission of heat, electricity, or sound.

Lava Fountains

eruptions where lava is forcefully sprayed into the air through a vent or fissure, resembling a fountain.

Scoria Cones

Volcanic cones made up of fragments of lava or rock ejected during explosive eruptions, usually with a bowl-shaped crater at the summit.

Basaltic Lava

A dark, fine-grained volcanic rock that forms from the quick cooling of basaltic lava, rich in iron and magnesium.