In H Carl McCall, Trustee of the New York Common Retirement

Multiple Choice

In H. Carl McCall, Trustee of the New York Common Retirement Fund, et al., Derivatively on Behalf of Columbia/HCA Healthcare Corporation v. Scott, suit was brought claiming a breach of fiduciary duties by the board with regard to alleged fraudulent billing practices. The board defended by citing the corporate charter, which limits the liability of directors for breach-of-duty claims as long as they did not act in bad faith. The court determined that:

A) an inclusion in the charter limiting liability for fiduciary duties owed is void as it is against public policy.
B) the board lacked the necessary experience to understand the nature of the practices but did not act in bad faith, so the charter inclusion would act to shield the board from liability.
C) the board ignored direct and indirect signs pointing to the fact that fraudulent practices were occurring and its failure to investigate breached its duty of care.
D) the shareholders suit was improper as a derivative action and needed to be filed as a direct action.