Louisiana Revised Statutes 12:1-870 – A. If a director or officer or related person of either pursues or takes advantage, directly or indirectly, of a business opportunity, that action may not be the subject of any form
Terms Used In Louisiana Revised Statutes 12:1-870
- 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
- person: includes a body of persons, whether incorporated or not. See Louisiana Revised Statutes 1:10
A. If a director or officer or related person of either pursues or takes advantage, directly or indirectly, of a business opportunity, that action may not be the subject of any form of relief, or give rise to an award of damages or other sanctions against the director, officer or related person, in a proceeding by or in the right of the corporation on the ground that such opportunity should have first been offered to the corporation, if the requirements of Paragraph (1) or (2) of this Subsection are satisfied:
(1) Before the director, officer or related person becomes legally obligated respecting the opportunity, the director or officer brings it to the attention of the corporation and either of the following occurs:
(a) Action by qualified directors disclaiming the corporation’s interest in the opportunity is taken in compliance with the same procedures set forth in La. Rev. Stat. 12:1-862.
(b) Shareholders’ action disclaiming the corporation’s interest in the opportunity is taken in compliance with the procedures set forth in La. Rev. Stat. 12:1-863, as if the decision being made concerned a director’s conflicting interest transaction.
(2) The duty to offer the corporation the particular business opportunity has been limited or eliminated pursuant to a provision of the articles of incorporation adopted, and in the case of officers and their related persons made effective by action of qualified directors, in accordance with La. Rev. Stat. 12:1-202(B)(6).
B. In any proceeding seeking equitable relief or other remedies based upon an alleged improper taking advantage of a business opportunity by a director, the fact that the director did not employ the procedure described in Subsection A of this Section before taking advantage of the opportunity shall not create an inference that the opportunity should have been first presented to the corporation or alter the burden of proof otherwise applicable to establish that the director breached a duty to the corporation in the circumstances.
C. For purposes of this Section, the term “required disclosure” as used in La. Rev. Stat. 12:1-862 and La. Rev. Stat. 12:1-863 means prior disclosure to those acting on behalf of the corporation of all material facts concerning the business opportunity that are then known to the director or officer.
Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.