Court Opinion

ID: 9734208
Source: CourtListenerOpinion
Date Created: 2023-08-26 17:28:20.93909+00
Date Added: 2024-06-11T18:26:46.816938
License: Public Domain

LIPEZ, Judge,
concurring:
I agree with the results reached by the majority on all aspects but I am somewhat uneasy with what might be the implication of some of the language used in connection with the diversion of corporate opportunities. I agree that, under the circumstances, Hillcrest improperly seized corporate opportunities to the detriment of Hill Co. However, it does not, as the majority seem to say, necessarily require the shareholders’ “consent to the acquisition of the opportunity by individual officers or directors instead of the corporation.” Ante p. 1082. Of course if the shareholders with knowledge of corporate opportunity consent, there is no problem. But that is not to say that, if there is no such consent, there is necessarily a usurpation.
Transactions involving corporate officers or directors and their corporations are governed by strict standards of fairness with a “heavy burden” on the interested corporate officers or directors of demonstrating the fairness of the transaction. Robinson v. Brier, 412 Pa. 255, 259, 194 A.2d 204, 207 (1963). Whether a corporate fiduciary has improperly availed himself of a corporate opportunity is a question of fact to be determined from the surrounding circumstances at the time the corporate opportunity arose. Borden v. Sinskey, 530 F.2d 478 (3 Cir. 1976). In my judgment, the appellees failed to sustain their burden of demonstrating fairness and hence the appellants are entitled to an accounting of Hillcrest’s profits.
CERCONE, President Judge, joins in this concurring opinion.