What is the current state of the law in which a director of a corporation is permitted to profit from a breach of his duty to the corporation and its stockholders?
MultiRegion, United States of America
The following excerpt is from Teren v. Howard, 322 F.2d 949 (9th Cir. 1963):
This case was tried on the assumption that Delaware law was controlling
[322 F.2d 953]
on the substantive issues. Under the law of that state, directors of a corporation are not allowed to profit by a breach of their duty to the corporation and its stockholders. The leading case of Guth v. Loft, Inc., (1939), 23 Del.Ch. 255, 270, 5 A.2d 503, 510, states the rule as follows:[322 F.2d 953]
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