Question

1. Gil is on the board of directors of a cable television corporation. Gil votes to create a 24 hour business law cable channel to be launched by the corporation. The channel bombs with very few viewers. Gil is most likely liable for breach of

1. none of the choices.
2. breach of duty of loyalty.
3. breach of duty of care.

2.A majority shareholder of a corporation instructs the board of directors to expel the director elected by minority shareholders. What is the likely outcome?

1. the director will be expelled because the decision was made by the other directors.
2. a breach of fiduciary duty by the majority shareholder.
3. not a breach of fiduciary duty by the majority shareholder since the board of directors should have refused to expel the minority elected director.

Answer 1

Question # 1. The correct answer is c. breach of duty of care.

Explanation: As the board of director he has the duty to take the due care of the business and should not suggest anything which is not profitable for the company or the corporate strategy should be aligned to the business objectives that organization can have. By acting carelessly the director has committed the breach of duty of care.

Question # 2. The correct answer is b.) a breach of fiduciary duty by the majority shareholder

Explanation: The breach of fiduciary duty by the majority shareholder happens when the majority shareholder does not show their obligation and duty towards the minority shareholders and in this case, they want to expel the director from minority shareholders they have actually committed a breach of fiduciary duty by the majority shareholder.