§ 23-1-35-5 — Directors and business opportunities; conflicts of interest

Indiana § 23-1-35-5

• Jurisdiction: Indiana
• Title 23: BUSINESS AND OTHER ASSOCIATIONS
• Art. 1: INDIANA BUSINESS CORPORATION LAW
• Ch. 35: Standards of Conduct for Directors

Text

(a) A director's taking advantage, directly or
indirectly, of a business opportunity may not be the subject of equitable
relief, or give rise to an award of damages or other sanctions against the
director, in a proceeding by or in the right of the corporation on the
ground that the opportunity should have first been offered to the
corporation, if one (1) or more of the following applies:
(1) The opportunity and all material facts concerning the
opportunity then known to the director were disclosed to or
known by the board of directors or a committee of the board of
directors before the director became legally obligated regarding
the opportunity, and the board of directors or committee of the
board of directors disclaimed the corporation's interest in the
opportunity.
(2) The opportunity and all material facts concerning the business
opportunity then known to the director were disclosed to or
known by the shareholders entitled to vote before the director
became legally obligated regarding the opportunity, and the
shareholders disclaimed the corporation's interest in the
opportunity.
(b) For purposes of subsection (a)(1), a business opportunity is
disclaimed if approved in the manner provided in section 2(c) of this
chapter as if the business opportunity were a conflict of interest
transaction.
(c) For purposes of subsection (a)(2), a business opportunity is
disclaimed if approved in the manner provided in section 2(d) of this
chapter as if the business opportunity were a conflict of interest
transaction.
(d) In any proceeding seeking equitable relief or other remedies
against a director for the director allegedly improperly taking
advantage of a business opportunity, the fact that the director did not
employ the procedure described in subsection (a) before taking
advantage of the opportunity does not create an inference that the
opportunity should have been first presented to the corporation or alter
the burden of proof otherwise applicable to establish that the director
breached a duty to the corporation under the circumstances.

Legislative History

As added by P.L.133-2009, SEC.28. Amended by P.L.1-2010, SEC.92.