Harris

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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:

  1. corporation is financially able to exploit the opportunity
  2. ...

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.