Ind. Code § 23-1-35-5
This is the official text of Ind. Code § 23-1-35-5, part of Indiana’s Code — part of the compiled statutory law of Indiana, published by the state as "Code." Browse the sections below, each linked to its official government source.
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Directors and business opportunities; conflicts of interest
Official statutory text
Sec. 5. (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.
As added by P.L.133-2009, SEC.28. Amended by P.L.1-2010, SEC.92.
(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.
As added by P.L.133-2009, SEC.28. Amended by P.L.1-2010, SEC.92.
Status: in_force · Read it on the official government site
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