Which of the Following Was the Result on Appeal in Auerbach

question 32

Multiple Choice

Which of the following was the result on appeal in Auerbach v.Bennett the case in the text in which a shareholder brought a derivative action after an internal audit of the GTE Corporation suggested that the corporation's management had paid significant amounts in bribes and kickbacks over a period of several years?

• A) The court ruled that the business judgment rule exempted the directors from liability.
• B) The court ruled that the business judgment rule exempted the directors from liability only so long as the directors could establish that the shareholders did not lose money on account of their actions.
• C) The court ruled that the business judgment rule exempted the directors from liability unless the shareholder could establish that the shareholders lost money on account of their actions.
• D) The court ruled that the business judgment rule did not apply because illegality was involved and that the corporation was, therefore, liable.
• E) The court ruled that the business judgment rule shielded the lawsuit insofar as foreign wrongdoing was alleged, but not for wrongdoing committed in the U.S.

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Definitions:

Peripheral Nervous System

The part of the nervous system that lies outside the central nervous system, responsible for transmitting signals between the central nervous system and the rest of the body.

Somatic and Autonomic

Relating to the division of the peripheral nervous system that controls the body's voluntary muscle movements (somatic) and regulates involuntary actions like heart rate and digestion (autonomic).

Autonomic Nervous System

The component of the nervous system responsible for controlling automatic bodily processes, such as the regulation of heart rate, digestion, and breathing rate.

Sympathetic Division

A component of the autonomic nervous system responsible for initiating the response commonly known as fight or flight.