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Question
Distanet Corporation is a competitor of Telenex Corporation in the personal computer market. After examining past and future price and sales data and after consulting an economist and an accountant, the directors of Distanet voted to reduce the price of that company's computers, believing that by reducing the price of their product, the corporation could compete more successfully with Telenex. The plan was put into operation, but it did not prove to be effective. In fact, Distanet lost money as a result of the plan. Aileen, a stockholder of Distanet, brings an action against the directors, seeking to hold them liable for the failure of the plan to improve Distanet's position in the computer market, and for the losses experienced by the corporation as a result of the implementation of the plan. Will she succeed in her suit?
A. No, because the directors are the managers of the corporation.
B. No, because the directors' decision was one subject to the business judgment rule.
C. No, because a stockholder does not possess the rights to sue the directors under any circumstance.
D. Yes, because shareholders are permitted to sue to allow a court to determine whether the directors have acted in the best interests of the corporation.
Answer
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