Michael was a director of Dot.com Tomorrow Inc, incorporated under the Canada Business Corporations Act. He was charged with failing to ensure that the corporation maintained adequate safety standards for its workers. He was furious, claiming that he was innocent. Michael hired the most expensive lawyer he could find and rented a limousine with driver to take him to the court every day of the three- week trial. Each night of the trial he dined out at the best restaurant in town. Eventually, he was acquitted and has asked the corporation to indemnify him for all these expenses. Which of the following is TRUE regarding the legal obligation of the corporation to indemnify Michael for these expenses?
A) So long as Michael fulfilled his fiduciary duty to act in the best interests of the corporation, Dot.com may be obliged to indemnify him for reasonable expenses.
B) Dot.com can only indemnify for reasonable expenses and, to the extent that Michael's expenses are not reasonable, they cannot be indemnified.
C) Dot.com may be obliged to indemnify because Michael had reasonable grounds for believing his conduct was lawful.
D) Dot.com may be obliged indemnify Michael because he was substantially successful on the merits of his defence.
E) all of the above
Correct Answer:
Verified
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