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Earl and Saundra are on the executive committee for Truetone Corporation. Earl uses information he acquired as vice president of the corporation to land a
Earl and Saundra are on the executive committee for Truetone Corporation. Earl uses information he acquired as vice president of the corporation to land a lucrative deal for his private company, a deal that would have made over a million dollars for Truetone. Saundra, who is the treasurer for Truetone but also is on the board of Earl's private company, helps Earl with the details and financing of his deal and agrees to withhold the information from Truetone's board of directors. Saul is a shareholder of Truetone. When Saul learns about how Earl and Saundra cheated Truetone out of a million- dollar deal, he is incensed. He demands that the board sue against Earl and Saundra, but the board refuses. Does Saul have any remedy? No, Saul has no remedy against Earl and Saundra because Saul was not directly injured by their actions. X Yes, Saul may sue Earl and Saundra directly because their actions cost Saul dividends. No, Saul has no remedy unless every shareholder of the corporation agrees to participate in a lawsuit. Yes Saul may bring a shareholder's derivate suit against Earl and Saundra
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