Practice question
A board approves a lawful new product after honestly reviewing credible studies. The product fails because of an unforeseen market change. The record establishes no bad faith, gross negligence or other breach. A shareholder argues that the loss alone makes every director personally liable. Evaluate the argument under the business judgment rule and RCC section 30.
Legal references
- Montelibano v. Bacolod-Murcia Milling Co., G.R. No. L-15092, 18 May 1962, https://www.lawphil.net/judjuris/juri1962/may1962/gr_l-15092_1962.html
- Teng v. Teng, G.R. No. 277015, 17 February 2025, main decision, https://lawphil.net/judjuris/juri2025/feb2025/gr_277015_2025.html
- Revised Corporation Code, RA 11232, sections 22, 30 and 39, https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/86463
Answer this question in flashcards to review your response and continue practicing.