While at home,Kyle Kinston,the president and CEO of Remstat,Inc.is called by the CEO of Viokam Corporation,who asks Kinston if Remstat would be interested in buying about 25 percent of the outstanding shares of Viokam.Remstat is a billion-dollar conglomerate that has contemplated acquiring Viokam for some time,but Kinston tells Viokam's CEO that Remstat is not interested.Kinston tells the CEO,however,that KKIM,Inc.is willing to buy the shares.Kinston is the 100 percent shareholder of KKIM.Viokam sells the shares to KKIM for $35 million.A year later,KKIM sells the shares for $55 million to a mutual fund company.When Remstat's directors discover KKIM's purchase and sale of the Viokam shares,they sue Kinston on behalf of the corporation.Which of the following is correct?

Question

Quizplus · Accepted Answer

The corporate opportunity to buy 25 percent of the outstanding shares of Viokam came to Kinston in her corporate capacity as the CEO of Remstat.Since Remstat had contemplated acquiring Viokam for a while,Kinston should have taken that opportunity and bought the shares for Remstat.Instead,she bought them for herself through KKIM.As such,she will be held liable to Remstat for usurping this corporate opportunity.

While at Home,Kyle Kinston,the President and CEO of Remstat,Inc