Question: 1 Are the reasons given by the board for not

1. Are the reasons given by the board for not installing lights legitimate? Was there any fraud or conflict of interest? Do the directors have any ethical responsibility to the surrounding neighborhood as secondary stakeholders?
2. Does the business judgment rule require the board’s decision to be legitimate? Is that the same as “rational”? Why or why not?
3. This case was decided before the landmark Smith v. Van Gorkom case in chapter. How would you apply the holding in that case to these facts? Who would prevail?
4. When deciding not to install lights has the board and the majority shareholder put their own interests ahead of the corporation’s interest? Is that a breach of their fiduciary duty? Why or why not?
5. Is it possible that installing the lights would not increase the profitability of the team? If so, how does that impact your analysis?

Defendants are the famous William Wrigley, who owns 80% of the stock, and directors of the Chicago National League Ball Club, which is the company that owns the Chicago Cubs. Every other major league team had installed lights, Defendant did not install them for the Cubs because he was concerned that night baseball would be detrimental to the surrounding neighborhood and that, in Wrigley’s opinion, baseball was a daytime sport. Plaintiff argued that the team was losing money, and that other teams had higher attendance during the weekdays because they played at night. Shareholder plaintiffs argued that the Cubs would draw more people with weekday night games. Plaintiff asserts that Defendant’s first concern should be with the shareholders rather than the neighborhood.

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  • CreatedNovember 06, 2014
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