business judgment rule in Tennessee

2005The business judgment rule, *400 when it applies, provides “a presumption that in making a business decision the directors [and officers] of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interest of the company.” Id. (quoting Aronson v. Lewis, 473 A.2d 805, 812 (Del.1984); accord, Lewis on Behalf of Citizens Sav.

2005The business judgment rule, when it applies, provides “a presumption that in making a business decision the directors [and officers] of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interest of the company." Id. (quoting Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984); accord, Lewis on Behalf 4 As this court explained in Lewis on Behalf of Citizens Sav.

2012Spiegel v. Buntrock, 571 A.2d 767, 774 (Del.1990); Zapata Corp. v. Maldonado, 430 A.2d 779, 782 (Del.1981).

1992Spiegel v. Buntrock, 571 A.2d 767, 774 (Del.1990); Zapata Corp. v. Maldonado, 430 A.2d 779, 782 (Del.1981).

2012Spiegel v. Buntrock, 571 A.2d 767, 774 (Del.1990); Zapata Corp. v. Maldonado, 430 A.2d 779, 782 (Del.1981).

1992Spiegel v. Buntrock, 571 A.2d 767, 774 (Del.1990); Zapata Corp. v. Maldonado, 430 A.2d 779, 782 (Del.1981).

2005As this court explained in Hall, under the business judgment rule, the duty of care required of directors and officers is “to act in good-faith and in the best interest of the corporation ‘[w]ith the care an ordinarily prudent person in a like position would exercise under similar circumstances. . . .’” Hall, 1996 WL 355074 , at *6 (quoting Tenn. Code Ann. §§ 48-18-301 (a), -403(a) (1995)); also citing Neese v. Brown, 405 S.W.2d 577, 580 (Tenn. 1964)).

2005When the rule applies, Tennessee aligns itself with the jurisdictions recognizing and following the "business judgment rule." Id. (citations omitted).5 However, if the plaintiff establishes the business judgment rule does not apply, the burden shifts to the directors or officers to establish that the act at issue satisfied the ordinary care standard.

2022Concerning the business judgment rule, courts “presume that a “a receiver [was] necessary to protect and manage the property of the [HOA] while Petitioners seek to remedy the harms to the [HOA] of this past conduct and seek to enjoin or prohibit similar future conduct.” - 11 - corporation’s directors, when making a business decision, acted on an informed basis, in good faith, and with the honest belief that their decision was in the corporation’s best interests.” Id. at 221-22 .

2012Bank & Trust Co. v. Boyd, 838 S.W.2d 215 (Tenn. Ct. App. 1992), this court discussed the business judgment rule as follows: Tennessee’s courts have consistently followed a noninterventionist policy with regard to internal corporate matters.

2005See 3A Fletcher at § 1036; Summers, 112 S.W.3d at 528-29 .

2005See 3A FLETCHER at § 1036; Summers v. Cherokee Children & Family Services, Inc., 112 S.W.3d 486, 528-29 (Tenn. Ct. App. 2002)).

2002LEXIS 384, at *19-*20; 3A FletcheR, supra, at § 1036. 65 As some courts have held, the business judgment rule “extends only as far as the reasons which justify its existence.” Resolution Trust Corp. v. Acton, 844 F.Supp. 307, 314 (N.D.Tex.1994) (quoting Joy v. North, 692 F.2d 880, 886 (2d Cir.1982), cert, denied, 460 U.S. 1051 , 103 S.Ct. 1498 (1983)).

2002Coop., 580 S.W.2d 565, 570 (Tenn.Ct.App.1978), that policy has no application to allegations that a public benefit corporation has abandoned any charitable purpose and has pursued private, rather than public, interests.

2002LEXIS 384, at *19-*20; 3A FletcheR, supra, at § 1036. 65 As some courts have held, the business judgment rule “extends only as far as the reasons which justify its existence.” Resolution Trust Corp. v. Acton, 844 F.Supp. 307, 314 (N.D.Tex.1994) (quoting Joy v. North, 692 F.2d 880, 886 (2d Cir.1982), cert, denied, 460 U.S. 1051 , 103 S.Ct. 1498 (1983)).

1997That standard of duty is one of “utmost good faith and loyalty.” Id. (quoting Cardullo v. Landau, 329 Mass. 5 , 105 N.E.2d 843 (1952)); see also Blank v. Chelmsford Ob/Gyn, P.C., 420 Mass. 404 , 649 N.E.2d 1102, 1105 (1995). 4 The rationale for the Wilkes decision has been stated as follows: In spite of the traditional adherence to majority rule and the business judgment rule, many courts in this country have moved steadily toward providing a remedy for oppressed minority shareholders.

1997That standard of duty is one of “utmost good faith and loyalty.” Id. (quoting Cardullo v. Landau, 329 Mass. 5 , 105 N.E.2d 843 (1952)); see also Blank v. Chelmsford Ob/Gyn, P.C., 420 Mass. 404 , 649 N.E.2d 1102, 1105 (1995). 4 The rationale for the Wilkes decision has been stated as follows: In spite of the traditional adherence to majority rule and the business judgment rule, many courts in this country have moved steadily toward providing a remedy for oppressed minority shareholders.

1994Id. at 248-49.

1992Allison v. General Motors Corp., 604 F.Supp. 1106, 1122 (D.Del.1985); DeMott § 5.04.