Wondering if there is a case for breaches of fiduciary duties, duty of loyalty, and duty of care in the selecting of the short lived CEO. Any legal experts out there want to chime in?
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I am certainly not a legal expert, but I know a guy. To prove a breach of Duty of Care, shareholders must demonstrate that the directors acted with gross negligence. In corporate law, the Duty of Care doesn't require directors to be right, but it does require them to be diligent. Proving breach can be difficult because of the business judgement rule.
Even if you prove the board was lazy or reckless, you must also prove that vehicle negligence caused actual harm to the corporation.
The Exculpatory Clause may be the biggest hurdle. Most corporations have a provision in their articles of incorporation that protect directors from personal liability for breaches of Duty of Care. Therefore. You must show that the lack of care was so extreme that it constituted a breach of Duty of Loyalty.
A shareholder would use a Section 220 Request to inspect books and records to recover the paper trail.
This information is not legal advice but hopefully, it helps!