Robert Meyerson was a member of the Telxon board of directors. Telxon develops and markets portable handheld
Question:
Robert Meyerson was a member of the Telxon board of directors. Telxon develops and markets portable handheld computers for retailers and wholesalers in various industries. When the company began experiencing operational problems, Telxon entered into a consulting agreement with Meyerson’s wholly owned company, Accipiter Corporation. The consulting agreement provided that Accipiter’s work product, created pursuant to the contract, would become the property of Telxon, and Accipiter could not render similar consulting services to any direct competitors of Telxon. Soon thereafter, Myerson formed Teletransaction for the purpose of developing a product known as “pen based computers” (PBCs). When shareholders sued Myerson for usurping a corporate opportunity, he claimed that Telxon’s CEO had considered and rejected the opportunity for Telxon to develop PBCs. Should the court dismiss the corporate opportunity-based challenge to the sale? Explain.
Step by Step Answer:
Law for Business
ISBN: 978-1259722325
13th edition
Authors: A. James Barnes, Terry M. Dworkin, Eric L. Richards