The board of directors of Northshore plc decided to make a takeover bid for South Shore plc.
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Question:
The board of directors of Northshore plc decided to make a takeover bid for South Shore plc. After the decision was taken, but before it was announced the following chain of events occurred:
- Blue, a director of Northshore plc, buys shares in South Shore plc
- Blue tells his friend White about the likelihood of the takeover and White buys shares in South Shore
- White in turn passes on the information to his friend Green who also buys shares in South Shore
- Green tells his friend Grey about the information, and he too buys shares in South Shore
- At a dinner party Blue, without telling him about the takeover proposal, advises his brother Tom to buy shares in South Shore and Tom does so.
Questions:
- Explain the Fiduciary duties of Directors and their relevance.
Related Book For
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
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