Business Law 7 Essay Example | Topics and Well Written Essays - 250 words

Business Law 7 - analyse ExampleThe ferns were liable because they were active in worry operations.Explanation Signal, Co had an appraiser who valued its subordinate at $230 million to $260 million. Another company, Burma Oil offered to buy the subsidiary at $480 million. Signals bill of directors accepted the offer. Signal Co.s shareholder sued Signal to prevent sale.Rule The board of directors go against the business judgment rule, by accepting the offer without getting the approval from other shareholders. An injunction is necessary until twain parties determine the companys value.The Eisner case is only one of the many cases that show how companies are lavish to some employees even when they have underperformed. In the course of 14 months that Michael Ovitz had worked, he did not increase inappropriate revenues and he also lacked experience when it came to managing a diversified public company.Ovitz was excessively compensated by the honorarium Board of directors, who ha d not consulted the shareholders of Disney. It was not only a waste of corporate finances, but the board violated the business judgment rule. This problem is widespread in companies where employees are favored by some team members in the management. The most viable solution for this issue would be to compensate a little metre of severance pay to an employee after consulting all shareholders in a