§ 33-785 — Taking advantage of a business opportunity.

Connecticut § 33-785

• Jurisdiction: Connecticut
• Title 33: Corporations
• Ch. 601: Business Corporations

Text

(a) If a director or officer pursues or takes advantage of a business opportunity directly, or indirectly through or on behalf of another person, that action may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against the director, officer or other person, in a proceeding by or in the right of the corporation on the ground that such opportunity should have first been offered to the corporation, if (1) before the director, officer or other person becomes legally obligated respecting the opportunity, the director or officer brings it to the attention of the corporation and either: (A) Action by qualified directors disclaiming the corporation's interest in the opportunity is taken in compliance with the same procedures as are set forth in section 33-783; or (B) shareholders' action disclaiming the corporation's interest in the opportunity is taken in compliance with the procedures set forth in section 33-784 in either case as if the decision being made concerned a director's conflicting interest transaction, except that, rather than making required disclosure, as defined in section 33-781, the director or officer shall have made prior disclosure to those acting on behalf of the corporation of all material facts concerning the business opportunity known to the director or officer; or (2) the duty to offer the corporation the business opportunity has been limited or eliminated pursuant to a provision of the certificate of incorporation adopted, and where required, made effective by action of qualified directors, in accordance with subdivision (6) of subsection (b) of section 33-636. (b) In any proceeding seeking equitable relief or other remedies based upon an alleged improper pursuit or taking advantage of a business opportunity by a director or officer directly, or indirectly through or on behalf of another person, the fact that the director or officer did not employ the procedure described in subparagraph (A) or (B) of subdivision (1) of subsection (a) of this section before pursuing or taking advantage of the opportunity shall not create an implication that the opportunity should have been first presented to the corporation or alter the burden of proof otherwise applicable to establish that the director or officer breached a duty to the corporation in the circumstances.

Legislative History

(P.A. 06-68, S. 15; P.A. 17-108, S. 14.) History: P.A. 17-108 substantially amended Subsec. (a) including by adding references to director, officer and other person, designating existing provisions re pursuit of business opportunities as new Subdiv. (1), redesignating existing Subdivs. (1) and (2) as Subparas. (A) and (B), amending redesignated Subdiv. (1)(A) by deleting “as if the decision being made concerned a director's conflicting interest transaction”, and adding new Subdiv. (2) re duty to offer corporation business opportunity limited or eliminated pursuant to provision of certificate of incorporation, and amended Subsec. (b) by replacing “improper taking advantage of a business opportunity by a director” with “improper pursuit or taking advantage of a business opportunity by a director or officer directly, or indirectly through or on behalf of another person”, replacing “interference” with “implication”, and made technical and conforming changes.