- Ag Docket
(defendant, closely-held farming corporation with long history in Montana, owned 51 percent by controlling shareholder with remaining 49 percent ownership held by two others; controlling shareholder proposed to award $1.2 million bonus (in stock and cash) to corporate president (son of controlling shareholder); shareholders voted in accordance with stock ownership and bonus approved; minority shareholders sought to void transaction and filed derivative action and direct action against corporation asserting breach of statutory and fiduciary duties and common law claims; trial court ruled for corporation; while transaction was a director's conflict-of-interest transaction under Mont. Code Ann. Sec. 35-1-461(2), it was saved by safe-harbor provision of Sec. 35-1-462(2)(c) as being fair to the corporation; action also satisfied business judgment rule and did not breach fiduciary duties and equities supported transaction; appellate court certified three questions to Montana Supreme Court which determined that transaction reviewable under safe-harbor provision and that business-judgment rule inapplicable to situations involving a director's conflict of interest, and set forth test for determining breach of fiduciary duties; on review, court affirmed on basis that transaction was fair to corporation based on the facts and record supported district court's other findings).
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