If a court determines that a manager's corporate decision amounted to self-dealing,
A)the business judgment rule will not apply.
B)the transaction being challenged will be automatically voided.
C)the manager is automatically personally liable to the corporation.
D)the manager will automatically be fired.

Question

Quizplus · Accepted Answer

If a court determines that a manager's decision amounted to self-dealing, the business judgment rule will not apply. The court will review the decision with heightened scrutiny, and the burden of proof will shift to the manager to demonstrate the transaction was fair and reasonable to the corporation. The transaction will not be automatically voided, and the manager will not automatically be personally liable or fired, but may face legal consequences if found to have breached their fiduciary duties.

If a Court Determines That a Manager's Corporate Decision Amounted