Seventh Circuit Gives a Wide Berth to Business Judgment Rule Following the Deference Required by the Indiana Legistlature in a Shareholder Oppression Case — Chicago Business Divorce and Shareholder Oppression Attorneys Near Naperville

No withstanding allegations of majority shareholder oppression, the Seventh Circuit rejected those arguments paying deference to the business judgment rule because of the Indiana Legislature’s directive to give officers and directors a wide berth for their business decisions.  The Court observed:

 “Indiana has statutorily implemented a strongly pro-management version of the business judgment rule,” G & N Aircraft, Inc. v. Boehm, 743 N.E.2d 227, 238 (Ind. 2001)— the rule that creates “a presumption that directors making a business decision, not involving self-interest, act on an informed basis, in good faith, and in the honest belief that their actions are in the corporation’s best interest.” Grobow v. Perot, 539 A.2d 180, 187 (Del. 1988), overruled on other grounds in Brehm v. Eisner, 746 A.2d 244 (Del. 2000).

You can listen to the oral argument before the court here:

You can read the decision here.

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