Sandy Ford became the single largest shareholder and a director of Acme Motor Co$.$ following that company$$s purchase of her successful business, ABC Electronic Components, Inc.

Following the acquisition, a dispute arose between Sandy and other directors. In response to the dispute, the Board of Directors of Acme created a special committee to explore options for resolving the dispute. Based on the committee$$s recommendation, the Board of Directors offered to purchase Sandy$$s stock at a price above the market value of the stock. This offer was conditioned upon Sandy agreeing to give up her seat on the Board of Directors, to not compete with any of Acme$$s subsidiaries, and to stop publicly criticizing board members. Sandy accepted the proposed resolution, and Acme paid her the agreed price for her stock.

A group of shareholders of Acme Motor Co$.$ then sued the Board of Directors on the basis that the board members had breached their fiduciary duties to shareholders by wasting corporate assets to buy Sandy$$s silence and resolve the dispute. In response, the Board of Directors argued that the business judgment rule provided a defense to its decision.

Provide your answer as two paragraphs.

Paragraph $1$: Who prevails in the lawsuit$$the shareholders or Board of Directors? Why?

Paragraph $2$: Does the corporate veil protect Board of Directors from the shareholders$$ claim in these circumstances?

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