The Duty of Loyalty Self-Quiz
George is a director of Washington
Corporation. Which of the following describes George’s position
with regards to Washington?
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Bob is a city councilman
and board member of Xault, Co. Bob, while acting in his capacity for the
city, learns that a division of Xault is about to purchase a fairly sizeable
tract of land in his town including a small piece of property that Bob
owns and placed up for sale two years ago. Bob does nothing in either
of his jobs to help promote that his land be purchased in the company’s
deal except to vote that the deal go forward. Subsequently, the land is
purchased by Xault, and a shareholder sues the firm for wasting assets
after the firm discovers that the property adjacent to the one that Bob
owned that was included in the purchase, had a major environmental liability
attached. In this situation, can Bob expect to face personal liability?
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Terry is on the boards of
two companies that compete in the aftershave market. Terry fails to disclose
this conflict or to step down from either of the boards. If Terry’s
acts are discovered and he is sued for violating his fiduciary duties,
under what theory is the suit likely to be filed?
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Harold is a director of XO
Co. In this capacity, he sold the company a piece of property that he
owned. Because of his position, he sold the company for an amount slightly
higher than he would have received on the open market. It turned out,
however, that the property appreciated a great deal and the company sold
it five years later for a significant gain. Is Harold liable for any act
in the transaction?
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The law of fiduciaries comes
to us from the law of:
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