Q 121

Kathy is a director Blackout Incorporated.Blackout has decided to expand,and is looking for property in a particular county.Kathy owns a piece of property in that county that is exactly what Blackout is looking for.Kathy informs the other seven directors of the property,and tells them that she had purchased the property for $250,000 three years ago.Kathy abstains from the purchase decision,and the other seven directors vote to purchase the property for $750,000,which is the current fair market value of the property.If Mike,a shareholder of Blackout,files suit seeking to recover (for the sole benefit of the corporation)the $500,000 profit made by Kathy,what will be the likely outcome?

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