Question

In Smith v. Van Gorkom, the court considered whether the business judgment rule protected board members who permitted the sale of a significant amount of stock by the retiring chairman of the board at an undervalued price, devaluing the company, Regarding the board's liability in this case, the court stated each of the following except:____________ A) normally, the board of directors is entitled to give some weight to statements made by its chairman regarding the valuation of stock. B) the board in this case had the expertise to make decisions without consulting outside experts but made a poor decision. C) failing to review the agreement to sell the stock showed a lack of care. D) failure to do a valuation analysis of the company showed that the board could not have been working with all appropriate information to render a proper decision.

Answer 1

B) the board in this case had the expertise to make decisions without consulting outside experts but made a poor decision.

Step-by-step explanation:

In Smith v. Van Gorkom, regarding the board's liability in this case, the court did not state that the board in this case had the expertise to make decisions without consulting outside experts but made a poor decision.

Generally, they lacked expertise and refused to get expert opinions or advice that could have helped the business.