Blue Bell is one of the countrys largest ice cream manufacturers. In 2015, the company suffered a

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Blue Bell is one of the country’s largest ice cream manufacturers. In 2015, the company suffered a listeria outbreak, causing it to shut down, recall all of its products, and lay off a third of its workforce. Three people died as a result of the listeria outbreak. Consequently, Blue Bell suffered a liquidity crisis that resulted in stockholder losses. A shareholder brought a derivative suit against Blue Bell’s directors, alleging a breach of the duty of care. The plaintiff pointed out numerous deficiencies in Blue Bell’s board regarding food safety. For example, there was no board committee charged with monitoring food safety, there was no process for arranging meetings to concern food safety compliance, and the board did not have a protocol requiring management to report food safety compliance issues to the board. There was evidence suggesting that there was no regular discussion of food safety issues during board meetings. The district court dismissed the case, and the plaintiff appealed. What arguments would you make on appeal? Did the board breach its duty of care?

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Dynamic Business Law

ISBN: 9781260733976

6th Edition

Authors: Nancy Kubasek, M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs

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