William Gurtler was president and a board member of Unichem Corp., which produced and sold chemical laundry products. While president of Unichem, he encouraged his plant manager to leave to join a rival business, which Gurtler was going to join in the near future. Moreover, Gurtler sold Unichem products to his son, G. B. Gurtler, in January 1982 at a figure substantially below their normal price and on credit even though G. B. had no credit history. Gurtler made the sales with full knowledge that G. B. was going to start a rival business.

Also at that time, Gurtler was aware that his wife was soliciting Unichem employees to join the new Gurtler Chemical Co., and he helped her design Gurtler’s label so that it would look like Unichem’s. On February 9, 1982, Gurtler guaranteed a $100,000 loan for Gurtler Chemical Co. with funds to be disbursed after he left Unichem, which occurred on March 12, 1982.

Chapter 48 Management of Corporations 1159 On March 15, 1982, he became president of Gurtler Chemical Co. Unichem sued Gurtler for breach of fiduciary duty and for the loss of profits that resulted. Gurtler contended that his sales to G. B. guaranteed needed revenue to Unichem and constituted a sound business decision that should be applauded and that was protected under the business judgment rule. Decide. Are any ethical principles applicable to this case? [Unichem Corp. v Gurtler, 498 NE2d 724 (Ill App)]

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