Is a board of directors authorized to commence an action to redress an alleged wrong against a corporation?
MultiRegion, United States of America
The following excerpt is from Lewis v. Anderson, 615 F.2d 778 (9th Cir. 1979):
Where a board of directors, in refusing to commence an action to redress an alleged wrong against a corporation, acts in good faith within the scope of its discretionary power and reasonably believes its refusal to commence the action is good business judgment in the best interest of the corporation, a stockholder is not authorized
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Findley v. Garrett, 109 Cal.App.2d 166, 174, 240 P.2d 421, 426 (1952).
The same rule was stated by Justice Brandeis:
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