Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 5

Missouri Fidelity Union Trust Life Insurance Company stock was trading at $2.63 per share. Eight directors sold their shares for $7.00 per share, conditioned on the resignation of eleven of the fifteen directors of the corporation and the provision that five nominees of the buyer be elected as a majority of the executive and investment committees. Did the directors violate their fiduciary duty? Would the answer be different if the directors had controlled a majority of the voting stock? [Snyder v. Epstein, 290 F. Supp. 652 (E.D. Wis. 1968).]