Question

his questions comes under MBA 5005 in a question for a paper. Legal and Ethical Challenges in a Multinational Organization. identify potentional ethical issues and propose recommendations legal and ethical. have 10 part question and stuck on a few of these questions and Scenarios.

Scenario: On the advice of the legal department , the board of directors for walexron decieded to seek enforcement of the judgement against Alf Abett, acting on a tip that Mr. Abett had inherited a large sum of money and that the other partners had no personnel assets. As it turned out, Mr. Abett only inherated 10,000 and did not have the funds to pay the judgment. Welexron incurred substantial attoney fees in attempting to collect its judgement from Goin Postal.

Question----Using the Business Judgment rule, did the board of directors fulfill its duty of care to shareholders in suing Alf Abett individually for the Goin Postal Judgement? Why or why not?

Answer 1

Board was right in his decision to seek enforcement of judgement against Afl Abett, As  in reaching their challenged decision, breached any one of the triads of their fiduciary duty — good faith, loyalty, or due care.

As this was done in good faith of company on acting upon advice of legal Department hence the incurred expediture is not due to board of directors inability to fulfill its duty of care insted it was a failure of leagal advisors . Directors acted in good faith and to fulfill their duty of care .