WY Bar Practice Questions - Wyoming Bar Examination Exam

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Directors of a Wyoming corporation make an informed, good-faith business decision that later turns out poorly. Shareholders sue, claiming the directors should be liable for the losses. Under the business judgment rule, the directors are:

Strictly liable for any loss the corporation suffers Liable unless they can prove the decision was profitable Liable because directors guarantee corporate success Generally protected from liability, because courts will not second-guess informed, good-faith decisions made without a conflict of interest

Correct Answer:

Generally protected from liability, because courts will not second-guess informed, good-faith decisions made without a conflict of interest

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