Business Judgment Rule New York

The importance of the business judgment rule 14 new york university journal of law and business 27 fall 2017 43 pages posted.

Business judgment rule new york. In the first case gail koff demolished an interior wall without authorization while combining two apartments in the washington irving condominium in harlem. As the business grows so does the level of responsibility for officers and directors. The condo board met its burden on summary judgment by establishing that it acted in good faith within.

The business judgment rule prohibits judicial inquiry into the actions of a condominium board as long as the board acts for the purpose of the condominium within its authority and in good faith. Understanding new york s business judgment rule officers and directors of start up corporations are responsible for managing and directing the business s affairs. 40 west 67th street corp.

Business judgment rule march 8 2016 staff of the firm no comments in our previous blog series on texas double derivative shareholder suit we touched briefly on the concept of business judgment rule when we discussed a board of directors decision to pursue or forgo corporate causes of action in the context of. The business judgment rule has been applied to condominium associations especially in new york. New york law update.

New york is now in accord with delaware in using the business judgment rule rather than the entire fairness doctrine when considering going private transactions but only if certain minority shareholder protections are in place. Kenneth cole productions inc shareholder litigation the new york court of appeals held that new york courts should apply the more deferential business judgment rule rather than the stricter entire fairness standard in reviewing going private mergers as long as certain shareholder protective conditions are implemented. The business judgment rule may be the most enigmatic doctrine in corporate law but it has always performed a relatively straightforward task in the corporate governance system of the united states namely protecting corporate directors from liability for honest mistakes.

Part of the new york corporate jurisprudence for many decades the business judgment rule was first applied to cooperative housing corporations in the landmark case of levandusky v. In connecticut the business judgment rule has been codified in the non stock corporation act at connecticut general statutes 33 1104 b.