Fact Pattern 41-4
Diversified Corporation's articles of incorporation prohibit a sale of its assets without a vote of the board of directors. Diversified's officers sell some assets to Enterprise Company without notice to the board. The officers also fail to pay Diversified's taxes on time, and some Diversified funds are not accounted for.
-Refer to Fact Pattern 41-4. With respect to Diversified's shareholders, this conduct is most likely
A) not oppressive because it is undertaken by Diversified's officers.
B) oppressive because Diversified's directors may be personally liable.
C) oppressive because Diversified's shareholders may be personally liable.
D) oppressive because it departs from the standards of fair dealing.

Question

Fact Pattern 41-4​
Diversified Corporation's articles of incorporation prohibit a sale of its assets without a vote of the board of directors. Diversified's officers sell some assets to Enterprise Company without notice to the board. The officers also fail to pay Diversified's taxes on time, and some Diversified funds are not accounted for.
-Refer to Fact Pattern 41-4. With respect to Diversified's shareholders, this conduct is most likely​
A) ​not oppressive because it is undertaken by Diversified's officers.
B) ​oppressive because Diversified's directors may be personally liable.
C) ​oppressive because Diversified's shareholders may be personally liable.
D) ​oppressive because it departs from the standards of fair dealing.

Quizplus · Accepted Answer

The officers' actions in selling assets without board approval, failing to pay taxes on time, and not accounting for funds, depart from the standards of fair dealing and may be viewed as oppressive by the shareholders. The fact that the officers undertook the conduct is not a defense against oppression of the shareholders.

Fact Pattern 41-4​ Diversified Corporation's Articles of Incorporation Prohibit a Sale of Its

Fact Pattern 41-4 Diversified Corporation's Articles of Incorporation Prohibit a Sale of Its