Opinion ID: 10313
Heading Depth: 3
Heading Rank: 2

Heading: Corporation Law

Text: 34 Corporate officers have a fiduciary duty to their companies. La.Rev.Stat. § 12:91. Nonetheless, they are permitted to do business with their corporations when: (1) the director disclosed his interest and the board authorized it in good faith; or (2) the director disclosed his interest and the shareholders authorized it in good faith; or (3) the transaction was fair at the time it was authorized or ratified by the board, a committee, or the shareholders. La.Rev.Stat. § 12:84(A). 35 McDonald contends that § 12:84(A) establishes a fairness standard. The plain language of the statute requires both (1) disclosure and approval and (2) fairness. Thus, fairness alone is insufficient. Because McDonald failed to disclose his interest and the board never approved his activities, he cannot rely on § 12:84.