Final answer:
If Michelson's investment in CompuPrint is challenged in court, the court will evaluate his conduct under the business judgment rule, which protects directors' business decisions made in good faith with reasonable care. The correct option is A.
Step-by-step explanation:
If CompuPrint turns out to be a poor investment, and a court hears a case challenging Michelson's decision, the court will most likely analyze his conduct based on the business judgment rule. The business judgment rule presumes that in making a business decision, the directors of a company have acted on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the company. Therefore, if Michelson's investment decision for CompuPrint was made with due diligence and a reasonable basis to indicate that it was a sound decision at the time, even if it ultimately did not pan out, the court would typically respect his decision and not hold him liable for the poor investment outcome.
The business judgment rule does not protect directors if they have violated their fiduciary duties, engaged in insider trading, acted in self-interest without regard to the company's welfare, or have been grossly negligent in their decision-making process. However, it shields them from court second-guessing their business decisions if they were made with reasonable care and without conflict of interest. It's important that the decision is not arbitrary, unnecessarily discriminatory, and treats foreign companies the same as domestic companies, ideally being based on sound science or factual data.
In contrast, the fairness rule focuses on the equitable treatment of all parties involved in a transaction, the insider trading rule deals with illegal trading based on non-public information, and the shareholder protection rule involves safeguarding the interests of the company's shareholders. Since the question pertains specifically to a business decision, the business judgment rule is the most fitting standard by which to evaluate Michelson's conduct.