Expansion Capital Group (ECG), a Delaware company, worked out of Sioux Falls, South Dakota. Matt Patterson invested $100,000 in ECG. ECG provides small business financing through business loans and merchant cash advances. ECG was a financial success, going from two employees to seventy in fewer than three years and from no revenue to $15 million in the same time period. ECG claimed that Patterson, as chief executive officer, breached fiduciary duties owed to ECG by overpaying an investor and failing to collect management fees owed to ECG. ECG further claimed that Patterson formed a participation fund to compete against ECG and used his position of trust and confidence with ECG to further his own private interests. Patterson used the business judgment rule defense to counter some of the claims against him. The trial court pointed out that this rule creates 3.) a “powerful presumption” in favor of actions taken by a loyal, informed, and authorized corporate decisionmaker.

Should a court accept Patterson’s argument that all of his actions were covered by the business judgment rule? Why or why not?