Question: James Gray was the president and managing officer of Peoples
James Gray was the president and managing officer of Peoples Bank and Trust Company. Frank Piecara was an old customer of the bank. Piecara was president of Mirage Construction, Inc. Gray directed Peoples Bank to make a $536,000 loan to a trust managed by Piecara, the loan proceeds to be used to provide working capital for Mirage. Gray obtained a security interest in Mirage's accounts receivable and contract rights for work Mirage was to perform for Rogers Construction. Gray did not perfect the security interest or notify Rogers that it should remit payments for Mirage's work directly to Peoples Bank. Piecara and Mirage defaulted on the loan to Peoples Bank. Gray was sued by his employer for breaching his fiduciary duty. Has Gray complied with the business judgment rule?
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