Final answer:
Shareholders of a private corporation with limited liability are not personally liable for the corporation's debts beyond their investment in the company. Therefore, in the case of a lawsuit exceeding the company's value, shareholders' personal property cannot be taken to pay the settlement.
Step-by-step explanation:
When it comes to a private corporation facing a lawsuit, the personal property of the shareholders is generally protected due to the concept of limited liability. In the scenario where the corporation is worth $1.7 million but loses a lawsuit worth $3 million, the value of personal property of the shareholders that can be taken to pay the settlement is $0, unless there are special circumstances or personal guarantees involved. Shareholder liability is typically limited to the amount they have invested in the corporation, which means their personal assets are not at risk for corporate debts and legal obligations.