Friday, October 12, 2012

Cookies Food Products, Inc. v. Lakes Warehouse Distributing, Inc. case brief

 Cookies Food Products, Inc. v. Lakes Warehouse Distributing, Inc. (Iowa 1988)
  • Even if the one of the three statutory alternatives is met, the director still needs to show he acted in “good faith, honesty, and fairness”.
  • Self-dealing transactions must have the “earmarks of arms-length transactions”.
  • Was the contract price fair and reasonable?

What does “conflicting interest” mean? ALI Principles §1.23(a) provides that a director is interested if the director has a business, financial, or familial relationship with a party to the transaction and that relationship would reasonable be expected to affect the director’s judgment with respect to the transaction in a manner adverse to the corporation.

What is the scope of disclosure? Director should disclose every material fact that they know about the transaction.

What is the correct standard for “fairness”? It has long been settled that a “fair” price is any price in that broad range of reasonableness which an unrelated party might have been willing to pay or accept following an arm’s length business negotiation. Is it fair market value?

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1 comment:

  1. A summary and case brief of Cookies Food Products, Inc. v. Lakes Warehouse Distributing, Inc., including the facts, issue, rule of law, holding and reasoning, key. left 4 dead survival warehouse


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