Connecticut General Statutes 33-785 – Taking advantage of a business opportunity
(a) If a director or officer pursues or takes advantage of a business opportunity directly, or indirectly through or on behalf of another person, that action may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against the director, officer or other 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 (1) before the director, officer or other person becomes legally obligated respecting the opportunity, the director or officer brings it to the attention of the corporation and either: (A) Action by qualified directors disclaiming the corporation’s interest in the opportunity is taken in compliance with the same procedures as are set forth in § 33-783; or (B) shareholders’ action disclaiming the corporation’s interest in the opportunity is taken in compliance with the procedures set forth in § 33-784 in either case as if the decision being made concerned a director’s conflicting interest transaction, except that, rather than making required disclosure, as defined in § 33-781, the director or officer shall have made prior disclosure to those acting on behalf of the corporation of all material facts concerning the business opportunity known to the director or officer; or (2) the duty to offer the corporation the business opportunity has been limited or eliminated pursuant to a provision of the certificate of incorporation adopted, and where required, made effective by action of qualified directors, in accordance with subdivision (6) of subsection (b) of § 33-636.
Terms Used In Connecticut General Statutes 33-785
- another: may extend and be applied to communities, companies, corporations, public or private, limited liability companies, societies and associations. See Connecticut General Statutes 1-1
- 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
(b) In any proceeding seeking equitable relief or other remedies based upon an alleged improper pursuit or taking advantage of a business opportunity by a director or officer directly, or indirectly through or on behalf of another person, the fact that the director or officer did not employ the procedure described in subparagraph (A) or (B) of subdivision (1) of subsection (a) of this section before pursuing or taking advantage of the opportunity shall not create an implication that the opportunity should have been first presented to the corporation or alter the burden of proof otherwise applicable to establish that the director or officer breached a duty to the corporation in the circumstances.