Corporate
Mar. 13, 2012
Business judgment rule loses ground in California
Corporate officers in California can now be second-guessed in a way that boards of directors cannot. By Gregg Amber and Ryan Chavez of Rutan & Tucker LLP
The business judgment rule is, in essence, a common law construct that shields those individuals that it applies to against liability to shareholders for business decisions made in good faith even if, in hindsight, those decisions prove to have been poorly reasoned or even negligent. In general, the business judgment rule creates a presumption in favor of such good faith business decisions that can only be overcome b...
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