Regal Cinemas Inc Operates a Movie Theatre in a Small

Regal Cinemas Inc operates a movie theatre in a small town in Manitoba.It has a chance to enter into long-term leases on the only other theatres in town.The landlord has refused to enter into the lease, however, unless Regal can put up a deposit of $50 000 and Regal has no money.Regal is very anxious to get the leases because there is an outstanding offer from MoviePlex Inc for all the shares of the corporation if the corporation has the leases on these other cinemas.The directors of the board, consisting of five people, decide that the best way to get Regal the money is for each of them to buy 100 shares for $100 each.The directors buy the shares, cause Regal to enter the leases, and then, on the next day, all the shareholders of Regal, including the directors, sell their shares to MoviePlex for $150.Once MoviePlex has all the shares, it elects new directors.The new directors cause the corporation to sue the former directors for the profits they made on the share sale, claiming that participating in the transaction in the way they did was a breach of their fiduciary duty.Do you agree? Explain you reasons.