Friday, March 23, 2012

Broz v. Cellular Information Systems, Inc. case brief

Broz v. Cellular Information Systems, Inc. (Del. 1996)

FACTS
Broz was President of RFBC and also on the board of a peer corporation [CIS]. He
received an opportunity that was not offered to CIS.
-Broz individually contacted a number of CIS directors, who told him that CIS would
not be interested in the opportunity.
-In trial, all CIS directors agreed that they would
have let Broz pursue the opportunity.
-At the time, CIS was being courted by PriCellular for acquisition. PriCellular and
RFBC competed for the opportunity described above.

RULES
Guth case said that director must offer opportunity to board if:
o Corporation is financially able to undertake the opportunity
o Opportunity is in line with corporation’s business and of practical advantage
to it.
o By embracing the offer, self-interest of director would come into conflict with
interests of the corporation

HOLDING
Court finds that although there hadn’t been a formal process, the informal contacts
proved that Broz had not acted in bad faith.

No comments:

Post a Comment

The Ins and Outs of Class Action Lawsuits: A Comprehensive Guide

Sometimes, you may buy a product only to find it defective. To make it worse, your search for the product reveals mass complaints. You can ...