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Illinois Compiled Statutes

805 ILCS 5/8.60 (2026)

Director conflict of interest

✓ current as of May 2026
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(805 ILCS 5/8.60) (from Ch. 32, par. 8.60)
    Sec. 8.60. Director conflict of interest.
    (a) If a transaction is fair to a corporation at the time it is authorized, approved, or ratified, the fact that a director of the corporation is directly or indirectly a party to the transaction is not grounds for invalidating the transaction or the director's vote regarding the transaction; provided, however, that in a proceeding contesting the validity of such a transaction, the person asserting validity has the burden of proving fairness unless:
        (1) the material facts of the transaction and the
    
director's interest or relationship were disclosed or known to the board of directors or a committee of the board and the board or committee authorized, approved or ratified the transaction by the affirmative votes of a majority of disinterested directors, even though the disinterested directors be less than a quorum; or
        (2) the material facts of the transaction and the
    
director's interest or relationship were disclosed or known to the shareholders entitled to vote and they authorized, approved or ratified the transaction without counting the vote of any shareholder who is an interested director.
    (b) For purposes of this Section, a director is "indirectly" a party to a transaction if the other party to the transaction is an entity in which the director has a material financial interest or of which the director is an officer, director or general partner.
(Source: P.A. 90-421, eff. 1-1-98.)

    
Notes of Decisions
Cited in 11 cases (1 in the last 5 years), 1998–2026 · leading case: Doly v. Chang (In Re Joy Recovery Tech. Corp.), 286 B.R. 54 (Bankr. N.D. Ill. 2002).
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Doly v. Chang (In Re Joy Recovery Tech. Corp.), 286 B.R. 54 (Bankr. N.D. Ill. 2002). · cites it 3× “Count IV Misappropriation 805 ILCS 5/8.60 Illinois corporation law provides: S 8.”
Joseph D. Olsen, Tr. of Huntley Ready Mix, Inc. v. Gary A. Floit, 219 F.3d 655 (7th Cir. 2000). · cites it 5× “Under 805 ILCS 5/8.60, the statute in question, a director who receives a personal benefit from a transaction with or by the corporation must demonstrate that the arrangement was “fair” to the corporation, unless either disinterested directors or disinterested shareholders…”
Witters v. Hicks, 780 N.E.2d 713 (Ill. App. Ct. 2002). · cites it 2× “60 of the Act (805 ILCS 5/8.60 (West 1998)). The court concluded that MWT’s existence was in imminent jeopardy if the status quo were maintained and third-party intervention not ordered.”
Kern v. Arlington Ridge Pathology, S.C., 893 N.E.2d 999 (Ill. App. Ct. 2008). · cites it 2× “805 ILCS 5/8.60 (West 2004). Plaintiff argues that by meeting prior to her arrival, Regan and Manglani voted to amend the articles as part of their plan to eventually remove her from Arlington.”
Fait, Robert v. Hummel, Albert, 333 F.3d 854 (7th Cir. 2003). “805 ILCS 5/8.60; Olsen v. Floit, 219 F.3d 655, 657 (7th Cir.”
Olsen, Joseph D. v. Floit, Gary A. (7th Cir. 2000). · cites it 5× “Under 805 ILCS 5/8.60, the statute in question, a director who receives a personal benefit from a transaction with or by the corporation must demonstrate that the arrangement was "fair" to the corporation, unless either disinterested directors or disinterested shareholders…”
Fait v. Hummel, 333 F.3d 854 (7th Cir. 2003). “805 ILCS 5/8.60; Olsen v. Floit, 219 F.3d 655, 657 (7th Cir.”
Witters v. Hicks - Rule 23 Order filed Sept. 4, 2002. Motion to publish granted November 21, 2002. (Ill. App. Ct. 2002). · cites it 2× “60 of the Act (805 ILCS 5/8.60 (West 1998)). The court concluded that MWT's existence was in imminent jeopardy if the status quo were maintained and third-party intervention not ordered.”
Kern v. Arlington Ridge Pathology, S.C. (Ill. App. Ct. 2008). · cites it 2× “805 ILCS 5/8.60 (West 2004). Plaintiff argues that by meeting prior to her arrival, Regan and Manglani voted to amend the articles as part of their plan to eventually remove her from Arlington.”
United States of Am. & The State of Illinois ex rel. Lorine Lagatta v. Reditus Labs., LLC; Tri-Cnty. Anesthesia SC; Myriad Genetics Labs., Inc.; Midwest Urological Grp., Ltd.; Aaron Rossi; Joseph Banno; Lawrence Rossi; AJR Diagnostics, LLC; AJR MD Consulting, LLC; RLL Aviation, LLC; PR Mfg. Enter., LLC; Bryan Zowin; MDXHealth, Inc. (C.D. Ill. 2026). “June 19, 2018) (citing 805 ILCS 5/8.60(a)). These principles demonstrate that Potter was not granted an equitable lien by LaGatta’s representation agreement.”
Sobek v. Stonitsch, 995 F. Supp. 918 (N.D. Ill. 1998). “Plaintiff objected to the adoption of the resolutions on the grounds that under the Illinois Business Corporation Act, 805 ILCS 5/8.60, the Individual Defendants, as parties to the proposed resolutions, were prohibited from voting upon them.”
— 805 ILCS 5/8.60(1) — 1 case
Doly v. Chang (In Re Joy Recovery Tech. Corp.), 286 B.R. 54 (Bankr. N.D. Ill. 2002). “Count IV Misappropriation 805 ILCS 5/8.60 Illinois corporation law provides: S 8.”
— 805 ILCS 5/8.60(2) — 1 case
Doly v. Chang (In Re Joy Recovery Tech. Corp.), 286 B.R. 54 (Bankr. N.D. Ill. 2002). “Count IV Misappropriation 805 ILCS 5/8.60 Illinois corporation law provides: S 8.”
— 805 ILCS 5/8.60(a) — 3 cases
Kern v. Arlington Ridge Pathology, S.C., 893 N.E.2d 999 (Ill. App. Ct. 2008). “805 ILCS 5/8.60 (West 2004). Plaintiff argues that by meeting prior to her arrival, Regan and Manglani voted to amend the articles as part of their plan to eventually remove her from Arlington.”
United States of Am. & The State of Illinois ex rel. Lorine Lagatta v. Reditus Labs., LLC; Tri-Cnty. Anesthesia SC; Myriad Genetics Labs., Inc.; Midwest Urological Grp., Ltd.; Aaron Rossi; Joseph Banno; Lawrence Rossi; AJR Diagnostics, LLC; AJR MD Consulting, LLC; RLL Aviation, LLC; PR Mfg. Enter., LLC; Bryan Zowin; MDXHealth, Inc. (C.D. Ill. 2026). “June 19, 2018) (citing 805 ILCS 5/8.60(a)). These principles demonstrate that Potter was not granted an equitable lien by LaGatta’s representation agreement.”
Kern v. Arlington Ridge Pathology, S.C. (Ill. App. Ct. 2008). “805 ILCS 5/8.60 (West 2004). Plaintiff argues that by meeting prior to her arrival, Regan and Manglani voted to amend the articles as part of their plan to eventually remove her from Arlington.”
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