Minnesota Statutes

Minn. Stat. § 302A.255 (2026)

Director Conflicts Of Interest

✓ current as of May 2026

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Subdivision 1.Conflict; procedure when conflict arises.

A contract or other transaction between a corporation and one or more of its directors, or between a corporation and an organization in or of which one or more of its directors are directors, officers, or legal representatives or have a material financial interest, is not void or voidable because the director or directors or the other organizations are parties or because the director or directors are present at the meeting of the shareholders or the board or a committee at which the contract or transaction is authorized, approved, or ratified, if:

(a) The contract or transaction was, and the person asserting the validity of the contract or transaction sustains the burden of establishing that the contract or transaction was, fair and reasonable as to the corporation at the time it was authorized, approved, or ratified;

(b) The material facts as to the contract or transaction and as to the director's or directors' interest are fully disclosed or known to the holders of all outstanding shares, whether or not entitled to vote, and the contract or transaction is approved in good faith by (1) the holders of two-thirds of the voting power of the shares entitled to vote which are owned by persons other than the interested director or directors, or (2) the unanimous affirmative vote of the holders of all outstanding shares, whether or not entitled to vote;

(c) The material facts as to the contract or transaction and as to the director's or directors' interest are fully disclosed or known to the board or a committee, and the board or committee authorizes, approves, or ratifies the contract or transaction in good faith by a majority of the directors or committee members currently holding office, but the interested director or directors shall not be counted in determining the presence of a quorum and shall not vote; or

(d) The contract or transaction is a distribution described in section 302A.551, subdivision 1, or a merger or exchange described in section 302A.601, subdivision 1 or 2.

Subd. 2.Material financial interest.

For purposes of this section:

(a) A resolution fixing the compensation of a director or fixing the compensation of another director as a director, officer, employee, or agent of the corporation, is not void or voidable or considered to be a contract or other transaction between a corporation and one or more of its directors for purposes of this section even though the director receiving the compensation fixed by the resolution is present and voting at the meeting of the board or a committee at which the resolution is authorized, approved, or ratified or even though other directors voting upon the resolution are also receiving compensation from the corporation; and

(b) A director has a material financial interest in each organization in which the director, or the spouse, parents, children and spouses of children, brothers and sisters and spouses of brothers and sisters, and the brothers and sisters of the spouse of the director, or any combination of them have a material financial interest. For purposes of this section, a contract or other transaction between a corporation and the spouse, parents, children and spouses of children, brothers and sisters, spouses of brothers and sisters, and the brothers and sisters of the spouse of a director, or any combination of them, is considered to be a transaction between the corporation and the director.

Subd. 3.Compensation agreements.

During any tender offer or request or invitation for tenders of any class or series of shares of a publicly held corporation, other than an offer, request, or invitation by the publicly held corporation or by another person pursuant to a plan of merger approved by the publicly held corporation's board in accordance with section 302A.613 or 302A.621, the publicly held corporation shall not enter into or amend, directly or indirectly, agreements containing provisions, whether or not dependent on the occurrence of any event or contingency, that increase, directly or indirectly, the current or future compensation of any officer or director of the publicly held corporation. This subdivision does not prohibit routine increases in compensation, or other routine compensation agreements, undertaken in the ordinary course of the publicly held corporation's business.

Notes of Decisions

Cited in 8 cases (1 in the last 5 years), 1988–2023 · leading case: Onvoy, Inc. v. SHAL, LLC., 669 N.W.2d 344 (Minn. 2003).

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Onvoy, Inc. v. SHAL, LLC., 669 N.W.2d 344 (Minn. 2003). · cites it 16× “Against SHAL, Onvoy first alleged the lease between SHAL and ONVOY is an interested-director transaction, prohibited by Minn.Stat. § 302A.255 (2002). Second, Onvoy alleged that the lease is an ultra vires transaction (one without authority), because the board of directors did…”

PJ Acquisition Corp. v. Skoglund, 453 N.W.2d 1 (Minn. 1990). · cites it 24× “751 (1988) (provisions generally codifying duties and proscribing certain conduct by officers and directors), it argues that the court may grant equitable relief to it in a direct action under Minn.Stat. § 302A.751 even though, admittedly, it was not a shareholder at the time…”

Possis Corp. v. Cont'l MacHines, Inc., 425 N.W.2d 286 (Minn. Ct. App. 1988). · cites it 35× “Under Minn.Stat. § 302A.255, subd. 1 (Supp.1987), a conflict of interest exists if a transaction involves “a corporation and an organization in * * * which one or more of its directors are directors.”

Leonard v. Mylex Corp. (In Re Northgate Comput. Sys., Inc.), 240 B.R. 328 (Bankr. D. Minn. 1999). · cites it 2× “Minn. Stat. § 302A.255. 54 . Given the intent-neutrality of the statutory elements, it is a misnomer and unnecessarily inflammatory to lag such transactions with the word "fraudulent.”

In Re Petition for Disciplinary Action Against Shinnick, 552 N.W.2d 212 (Minn. 1996). · cites it 2× “See Minn. Stat. § 302A.255, subd. 1 (1992). Shinnick also violated Rule 8.”

Larson v. Lakeview Lofts, LLC, 804 N.W.2d 350 (Minn. Ct. App. 2011). · cites it 4× “There are well-established principles regarding the obligations of directors and officers in self-dealing: they owe a fiduciary duty to the corporation when acting in their personal capacity to avoid self-dealing, Minn.”

In re Medtronic, Inc. Shareholder Litig.. (Minn. Ct. App. 2016). · cites it 2× “Counts VI and VIII-X allege harm based on violations of Minn. Stat. § 302A.255 (2014) (count VI), §§ 302A.”

Walsh v. Buchholz (D. Minnesota 2023). · cites it 2× “Minn. Stat. § 302A.255, subdiv. 1. In order to establish the ratification defense, the Apollonia Defendants must prove that plaintiffs had full and complete knowledge of all the material facts concerning the merger and that they knowingly and voluntarily assented to the merger.”

Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.