Opinion ID: 1059334
Heading Depth: 1
Heading Rank: 8

Heading: Safe Harbor Defenses

Text: The defendants assert that the chancellor failed to apply the law in effect at the time [he] rendered [his] decision, and that his failure to apply Maryland law violated the Full Faith and Credit, Due Process, and Commerce Clauses of the United States Constitution. In support of these arguments, the defendants note that Maryland law provides a safe harbor for corporate directors who act in good faith in discharging their corporate duties. [2] The defendants also argue that the chancellor should have conducted a hearing concerning whether they took their actions as corporate officers in good faith. These arguments are completely precluded by our holding in Tauber I that the defendants were trustees in dissolution of JMHI, rather than corporate directors, following JMHI's charter revocation in 1973. Id. at 455, 499 S.E.2d at 844. Therefore, any defenses of good faith in the exercise of business judgment that may be asserted by corporate directors of a non-profit corporation are inapposite here. See Code § 13.1-870; Lake Monticello Owners' Ass'n v. Lake, 250 Va. 565, 571, 463 S.E.2d 652, 656 (1995). See also Md.Code Ann., Corps. & Ass'ns § 2-405.1 (2001); Werbowsky v. Collomb, 862 Md. 581, 766 A.2d 123, 138 (2001).