Dan Is a Director of a Corporation,and Without Disclosing His

Essay

Dan is a director of a corporation,and without disclosing his conflict of interest,he entered into a contract to supply the corporation with widgets.The contract was made in the name of his mother so that the corporation would not know that Dan was involved.Pat is a minority shareholder in the corporation,has found out about the conflict,and intends to bring a derivative action against Dan.Explain what a derivative action is.Why is a derivative action appropriate in the circumstances? What must Pat show in order to bring a derivative action? What remedy might a court award?