MEE Practice Questions - Multistate Essay Examination Exam

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A director of a Delaware corporation learns that the corporation is about to lease real estate it needs for expansion. The director quietly buys the property personally and resells it to the corporation at a profit, after full disclosure to the board, which approves. What is the director's exposure?

Strictly liable; corporate opportunity doctrine is absolute Liable for breach of duty of loyalty unless disinterested directors approved after full disclosure and the deal is fair No liability because the director disclosed the transaction Liable only if the corporation suffered actual damages exceeding 10% of net worth

Correct Answer:

Liable for breach of duty of loyalty unless disinterested directors approved after full disclosure and the deal is fair

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