Q5 Donna and her husband Reed Taylor created AIA Corporation. When they later divorced, as part of the divorce settlement, Donna received certain redeemable shares of stock. Ten years later, the corporate directors sought to reorganize and Donna, along with AIA, entered into a Letter Agreement that changed the redemption of Donna's shares. Shareholder approval was neither sought nor given for the Letter Agreement despite the fact that it purported to authorize the redemption of Donna's shares at an interest rate higher than authorized in the articles of incorporation without shareholder approval. Several years, AIA discontinued paying Donna for the redemption of her shares and she sued. AIA argues that it is not required to honor the Letter Agreement because it was an ultra vires act. Which of the following statements are correct?

A. The court will rule in favor of Donna despite the fact that the corporation committed an ultra vires act.

B. The court will not rule in favor of Donna because the corporation (through its directors) had no authority to enter into the new agreement without shareholder approval.

C. The directors of the corporation may be found personally liable to the corporation for having exceeded their authority.

D. Both (A) and (C) are correct.