Cuker v. Mikalauskas case brief

Cuker v. Mikalauskas case brief summary
692 A.2d 1042 (1997)

CASE SYNOPSIS

Petitioner, a publicly regulated utility, appealed the denial of its motion for summary judgment by the Philadelphia Court of Common Pleas (Pennsylvania), in a derivative action brought by respondent, minority shareholders.

CASE FACTS
Petitioner public utility sought summary judgment to terminate respondent's minority shareholders derivative action. The lower court denied the motion, holding that the "business judgment rule" was inapplicable in Pennsylvania. Petitioner's first appeal was then denied due to unresolved factual questions and the lower court then refused to consider the factual disputes due to its prior holding. Petitioner then applied for extraordinary relief which was granted and the state supreme court formally adopted the rule holding directors personally liable only for fraudulent conduct or acts ultra vires.

DISCUSSION

• The lower court's decision was reversed and the case remanded to determine whether the underlying business decision was made under proper circumstances in light of the fact that the "business judgment rule" would prohibit the court from examining the merits of the underlying business decision.

CONCLUSION
The court reversed and remanded to determine the application of the "business judgment rule" in the context of petitioner's motion for summary judgment.


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