The Shareholders of Beazer Homes USA Filed Suit Against the Directors

Multiple Choice

The shareholders of Beazer Homes USA filed suit against the directors for the compensation plan that the Board approved for officers that provided the officers with bonuses despite the losses the company experienced and the continuing declines in sales of homes.Which of the following is correct about the suit?

A) Shareholders are not permitted to sue their own directors.
B) Absent fraud or illegality, the shareholders have no rights against the directors.
C) The shareholders will need to establish a violation of the business judgment rule.
D) Unless the shareholders were harmed directly, they have no right to bring suit or recover.