Utah Code
Utah Code § 16-10a-851 (2026)
Judicial action
✓ laws through the 2026 General Session (checked Sept. 2026)
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A transaction effected or proposed to be effected by a corporation or by any entity controlled by the corporation that is not a director's conflicting interest transaction may not be enjoined, be set aside, or give rise to an award of damages or other sanctions, in a proceeding by a shareholder or by or in the right of the corporation, solely because a director, or any person with whom or which the director has a personal, economic, or other association, has an interest in the transaction.
A director's conflicting interest transaction may not be enjoined, be set aside, or give rise to an award of damages or other sanctions, in a proceeding by a shareholder or by or in the right of the corporation, solely because the director, or any person with whom or which the director has a personal, economic, or other association, has an interest in the transaction, if:
directors' action respecting the transaction was at any time taken in compliance with Section 16-10a-852;
shareholders' action respecting the transaction was at any time taken in compliance with Section 16-10a-853; or
the transaction, judged according to the circumstances at the time of commitment, is established to have been fair to the corporation.
Notes of Decisions
Cited in 4
cases, 2006–2013 · leading case: McLaughlin v. Schenck, 2009 UT 64, 220 P.3d 146.
McLaughlin v. Schenck, 2009 UT 64, 220 P.3d 146. “§ 16-10a-851 (2005). In adopting these procedures for nontransaction-related conflicts, we recognize that many aspects of corporate governance are unfair.”
McLaughlin v. Schenk, 2013 UT 20, 299 P.3d 1139. “"We therefore remand[ed] for a determination of whether the [2005] [WJlaivers were fair within the meaning of Utah Code section 16-10a-851, which is a fact-intensive inquiry focusing on whether the waivers were beneficial to the corporation and the shareholders and whether they…”
MediaNews Grp., Inc. v. McCarthey, 432 F. Supp. 2d 1213 (D. Utah 2006). “Shareholders’ action respecting a transaction is effective for purposes of Subsection 16-10a-851(2)(b) if a quorum existed pursuant to Subsection (2) and a majority of the votes .”
McLaughlin v. Schenk, 2013 UT 20. ““We therefore remand[ed] for a determination of whether the [2005] [W]aivers were fair within the meaning of Utah Code section 16-10a-851, which is a fact-intensive inquiry focusing on whether the waivers were beneficial to the corporation and the shareholders and whether they…”
Utah Code § 16-10a-851(2)(a): 2 cases
McLaughlin v. Schenk, 2013 UT 20, 299 P.3d 1139. “"We therefore remand[ed] for a determination of whether the [2005] [WJlaivers were fair within the meaning of Utah Code section 16-10a-851, which is a fact-intensive inquiry focusing on whether the waivers were beneficial to the corporation and the shareholders and whether they…”
McLaughlin v. Schenk, 2013 UT 20. ““We therefore remand[ed] for a determination of whether the [2005] [W]aivers were fair within the meaning of Utah Code section 16-10a-851, which is a fact-intensive inquiry focusing on whether the waivers were beneficial to the corporation and the shareholders and whether they…”
Utah Code § 16-10a-851(2)(b): 1 case
MediaNews Grp., Inc. v. McCarthey, 432 F. Supp. 2d 1213 (D. Utah 2006). “Shareholders’ action respecting a transaction is effective for purposes of Subsection 16-10a-851(2)(b) if a quorum existed pursuant to Subsection (2) and a majority of the votes .”
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