1. From 2000 to 2018, Harris was a director of Northeast Harbor Golf Club, Inc. (the Club), a Delaware corporation. The Club owns and operates an 18-hole golf course in Northeast Harbor, Maine. Throughout her time on the board, the Club had continuous financial difficulties. Occasionally, the board discussed developing various parcels of real estate it owned surrounding the golf course to raise money, but never did so, despite Harris being in favor of such actions. 
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3. In 2016, a real estate agent approached Harris because he knew she was connected to the Club and pitched her about a parcel adjacent to the Club that was for sale by a third party. Harris decided to buy the parcel for herself. She told two individual board members of her intentions to purchase the parcel at the time but did not disclose the purchase at a board meeting until 2017, saying she had no current plans to develop the land.
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5. In 2018, she began making plans to develop homes on the property. Upon learning of these plans, the other board members became concerned and thus asked Harris to resign from the board. She acquiesced.
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7. 1. The board is considering suing Harris over her purchase and development of the parcel. They consult you about a possible cause of action under state corporate law and the likelihood of success. What do you tell them?
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9. 2. Assume Harris sought your advice on how to proceed in 2016 when she was contemplating buying the parcel. What advice would you have given her?
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11. 3. How would your analysis change if the Club has the same §122(17) provision in its charter as Jive Software?

Answer rating: 100% (QA)

1 Under state corporate law the board may consider pursuing a cause of action against Harris for breach of fiduciary duty As a director of the Club Ha... View the full answer