Perspective
Jul. 12, 2016
A cautionary tale of California's business judgment rule
A recent decision offers cautionary lessons that California's business judgment rule may only protect officers and directors upon their showing of a diligent, reasonable investigation before taking corporate action. By Stephen Ram
The decision in Palm Springs Villas II Homeowners Association Inc. v. Parth, 2016 DJDAR 6013 (June 21, 2016), offers cautionary lessons that California's business judgment rule may only protect officers and directors upon their showing of a diligent, reasonable investigation before taking corporate action.
In Parth, the association's covenants, conditions and restrictions (CC&Rs) and bylaws empowered the bo...
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