Kamin v. American Express Co

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Facts

AMEX had a decision as to distribute certain stocks ($4M) to shareholder in kind or sell them on the market ($8M). AMEX decided to distribute the stocks because they felt holding them would decrease the price of the shares.

Holding

The court decided that the business judgment rule applied, and therefore AMEX was not liable. This means that if a decision is bad for shareholder value, but the decision was "informed", then there is no liability on behalf of the directors.

Notes

If the plaintiff had brought a duty of loyalty claim and rebutted the business judgment rule, they would have won the case on its merits and if they were able to demonstrate that the stock sale was a better deal for the corporation.