Question

Tony is the president of Soprano Corporation (SC). Tony decided that SC should manufacture large, gas-guzzling...

Tony is the president of Soprano Corporation (SC). Tony decided that SC should manufacture large, gas-guzzling SUVs just before gas prices rose dramatically. As a result, SC lost millions of dollars and now the shareholders of SC want to sue Tony for his bad decision.

Would Tony be personally liable for his bad business decision? What would he have to show in order to avoid liability?

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Answer #1

As per the case , Tony has taken decision for manufacturing gas-guzzling SUVs just before gas prices raised dramatically .

As decision was taken before the changes in price of gas ,this suggest that Tony (president) was aware of changes of business environment and still taken such decisions ,and he has ultimate power of management entrusted by the shareholders of the companies and due to this decision which is taken in light of business environment

Tony will be liable but only for the money which has benefited because of this decision then he will be held liable personally otherwise company has to bear the loss due to bad decision making .

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