Auerbach v. Bennett (N.Y.1979)
Litigation Committee ‘investigates’ cases of corporate bribery and finds no reason for
filing a claim.
Court rules that it can investigate the independence of the Committee as an initial
matter. Examination of Committee has two components:
o Selection of procedures appropriate to the pursuit of its charge
o Substantive decision predicated on the procedures chosen. Decision itself
falls squarely within business judgment rule
Litigation Committee ‘investigates’ cases of corporate bribery and finds no reason for
filing a claim.
Court rules that it can investigate the independence of the Committee as an initial
matter. Examination of Committee has two components:
o Selection of procedures appropriate to the pursuit of its charge
o Substantive decision predicated on the procedures chosen. Decision itself
falls squarely within business judgment rule
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