Business Judgment Rule Clause Samples

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Business Judgment Rule. It follows from the prudence standard that a MBT fund trustee (not qualifying as an ‘investment adviser’ under the Advisers Act) is subject to the standard of a prudent investor as described in the Restatement (Third) of Trusts and all other fund fiduciaries are subject to the standard of a prudent professional person in similar circumstances. At first sight, a fund manager seems to have to comply with a much higher standard than a trustee-director of a MBT fund, considering that he must act as an average manager instead of an average investor. The fund manager is held to act in accordance with a standard of behaviour that we would normatively expect of fund managers at the time that the activities took place. It can be argued that a fund manager would normally be expected to possess more knowledge and skill than an ordinary investor as a result of which the expectations of what an average manager would do under similar circumstances are also likely to be much higher than what can be expected of an average person. However, US courts appear to have followed a different approach. The duty of care, as applied by US courts, has been often constrained by the business judgment rule. This rule stems from corporate law and holds the presumption that in making business decisions, the directors of a corporation acted on an informed basis, in good faith and in the best interest of the corporation.304 Under this rule, a director will not be found liable even if the decision itself would not have been made by the average director.305 The rule however does not apply in case no decisions are involved, the decision was uninformed, or in case there is a showing of a conflict of interest, fraud or other bad faith conduct, or gross negligence.306 With respect to the duty to disclose material information to investors, which forms part of the duty of care, it follows from this that material information may only be withheld in case premature disclosure would influence a business decision, such as the signing of a contract. In case the disclosure is of no relevance to business decisions, such as the information contained in a (statutory or summary) prospectus, liability may be imposed for non-disclosure.307 303. ▇▇▇▇▇ v. Household Int’l, Inc., 500 A.2d 1346 (Del. Supr. 1985). 304. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, 473 A.2d 805, 812 (Del. Supr. 1984).
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Business Judgment Rule. The Manager shall be entitled to make reasonable decisions in good faith and in the best interest of the Company and its Members. The Manager shall be able to rely on information, opinions, analysis, reports or statements, written or verbal, including but not limited to legal opinions, financial reports, financial statements or other financial data, sales and marketing statistics, data, and evidence prepared or presented by: Any one or more Members, Managers, Officers or employees of the Company whom the Manager reasonably believes, based upon verifiable and persuasive evidence, to be reliable and competent in the matter presented, and/or Legal counsel, certified public accountants (CPA), financial and investment professionals, fundraisers, technical experts, sales and marketing experts, online sales funnel experts, or all other persons that the Manager reasonably believes valuable, professional, and/or expert competence and counsel, and/or Any entity, person, or committee of trusted advisors, duly vetted, and of which Manager reasonably believes has or will provide good, valuable, and wise counsel to the Business and the Company; such decision based upon verifiable and persuasive evidence of such person’s or entity’s authority, influence, and competence to make such counsel regarding the Business and the Company.
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Business Judgment Rule. In conducting an Exit Transaction, the ---------------------- Majority Holders shall be guided by corporate law principles and decisions governing the sale of a Delaware corporation or its assets with a goal of maximizing such corporation's value at a sale or liquidation for its stockholders' benefit. Without limitation of the foregoing, the Majority Holders shall enjoy the benefit of the business judgment rule and other protections afforded directors under Delaware law with respect to all of their decisions and actions in connection with any Exit Transaction to the maximum extent permitted by law.
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  • Attachments; Judgments Any portion of Borrower’s assets is attached or seized, or a levy is filed against any such assets, or a judgment or judgments is/are entered for the payment of money, individually or in the aggregate, of at least $250,000, or Borrower is enjoined or in any way prevented by court order from conducting any part of its business; or

  • Standards for Determining Commercial Reasonableness Borrower and Silicon agree that a sale or other disposition (collectively, "sale") of any Collateral which complies with the following standards will conclusively be deemed to be commercially reasonable: (i) Notice of the sale is given to Borrower at least seven days prior to the sale, and, in the case of a public sale, notice of the sale is published at least seven days before the sale in a newspaper of general circulation in the county where the sale is to be conducted; (ii) Notice of the sale describes the collateral in general, non-specific terms; (iii) The sale is conducted at a place designated by Silicon, with or without the Collateral being present; (iv) The sale commences at any time between 8:00 a.m. and 6:00 p.m; (v) Payment of the purchase price in cash or by cashier's check or wire transfer is required; (vi) With respect to any sale of any of the Collateral, Silicon may (but is not obligated to) direct any prospective purchaser to ascertain directly from Borrower any and all information concerning the same. Silicon shall be free to employ other methods of noticing and selling the Collateral, in its discretion, if they are commercially reasonable.

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