A Majority Shareholder and Her Son Stephanie Gately was the majority shareholder of Campbell Farming Corporation. Stephanie controlled 51 percent of the company's shares, while the minority shareholders controlled the remaining 49 percent. Stephanie was the director of the company, and her son, Robert Gately, was the president of the company. Stephanie offered a bonus to her son. The minority shareholders voted their shares against the bonus, but because the majority shareholder voted her shares in favor of the bonus, the transaction was approved. The minority shareholders sued the corporation, its majority shareholder, and her son, the president of the corporation. The plaintiff minority shareholders alleged breach of statutory and fiduciary duties. After consideration of the business judgment rule, the district court ruled that the bonus transaction did not constitute a breach of fiduciary duties. The plaintiff minority shareholders appealed. 1. If you were a minority shareholder of Campbell Farming Corporation, would you think that the corporation's director breached her fiduciary duties? 2. What is the business judgment rule? How did this rule affect the district court's decision? The Wrap-Up at the end of the chapter will answer these questions. As the Case Opener demonstrates, various groups of individuals within a corporation have their own priorities and agendas. Page 913 Not surprisingly, these often come into conflict. To ensure that such conflicts are equitably resolved. statutory laws delegate particular roles, duties, and rights to each group, The statutory law governing corporations has a long and dynamic history. In 1946, the American Bar Association (ABA) drafted the first version of the Model Business Corporation Act (MBCA). Like almost all new laws, MBCA met with varying degrees of success, and over time, legislatures have molded it to achieve certain objectives. The ABA has amended the act numerous times since 1946. and more than 25 states have adopted at least part of it. When the law changes, however, it often changes at an uneven pace. A sudden reformation sometimes interrupts a trend of incremental change. Thus, after nearly 40 years of minor revisions, the ABA in 1984 discontinued its revisions of MBCA and drafted the Revised Model Business Corporation Act (RMBCA). More than half the states have adopted all or part of RMBCA. This chapter explains the duties and rights set forth in RMBCA and common law