Nancy Harris was the president of the gold club.
ALI Rule: In the ALI there is a duty to disclose and this is satisfied by disclosing during a board meeting. At this meeting, the board can make a decision (a majority of disinterested board members) on what to do with the opportunity. The presentation of the opportunity has to be done in a fair way.
GGCL: Whether it is a corporate opportunity. If it is a corporate opportunity, and you make disclosure, and the other side says that they do not want it, then this is a complete defense if another party takes over the firm and says that they want it. If it was not a corporate opportunity, then there was no duty to disclose. The Delaware definition of corporate opportunity as:
- corporation is financially able to exploit the opportunity
The most important element of the test is if the opportunity is within the line of business of the company.
Lesson: The way you get into trouble is not when you are dealing with your friends/buddies on the board. The problem occurs when you are told to take it and that person steps away, but the new person thinks it was a good opportunity. Then you are leaving it open to the later party to say that they wanted it.