Maine Revised Statutes Title 13-C Sec. 872 – Judicial action
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1. Nonconflicting-interest transaction not actionable. A transaction effected or proposed to be effected by a corporation, or by an entity controlled by a corporation, may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation on the ground that the director has an interest regarding the transaction if it is not a director’s conflicting-interest transaction.
[PL 2007, c. 289, §28 (AMD).]
Terms Used In Maine Revised Statutes Title 13-C Sec. 872
- Controlled by: means a person subject to control by another person. See Maine Revised Statutes Title 13-C Sec. 871
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
2. Conflicting-interest transaction not actionable if standards met. A director’s conflicting-interest transaction may not be the subject of equitable relief or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation, on the ground that the director has an interest regarding the transaction, if:
A. Directors’ action regarding the transaction was taken in compliance with section 873 at any time; [PL 2007, c. 289, §28 (AMD).]
B. Shareholders’ action regarding the transaction was taken in compliance with section 874 at any time; or [PL 2007, c. 289, §28 (AMD).]
C. The transaction, judged according to the circumstances at the relevant time, is established to have been fair to the corporation. For purposes of this paragraph, a transaction is fair to a corporation if, taken as a whole, the transaction was beneficial to the corporation, taking into appropriate account whether the transaction was:
(1) Fair in terms of the director’s dealings with the corporation; and
(2) Comparable to what might have been obtained in an arms-length transaction, given the consideration paid or received by the corporation. [PL 2007, c. 289, §28 (AMD).]
[PL 2007, c. 289, §28 (AMD).]
SECTION HISTORY
PL 2001, c. 640, §A2 (NEW). PL 2001, c. 640, §B7 (AFF). PL 2003, c. 344, §B69 (AMD). PL 2007, c. 289, §28 (AMD).