Daniel, Tricia, Harry, Gracie and Jack are shareholders in a…
Daniel, Tricia, Harry, Gracie and Jack are shareholders in a public corporation called Boulder Moving Company, Inc. (“BMC”). BMC is a national organization that handles moves for individuals and business. The board of directors of BMC announces a plan to expand BMC’s business beyond the U.S. into international markets. Daniel, Tricia, Harry, Gracie and Jack, think this is a terrible idea and will harm the company. They launch a proxy fight to take over control of BMC. The existing BMC board prepares detailed information about why the international market will be lucrative and beneficial to BMC and spends additional funds making its argument in person to some of BMC’s major shareholders. After the vote Daniel, Tricia, Harry, Gracie and Jack gain control of BMC. Is the BMC’s post proxy fight payment to Daniel, Tricia, Harry, Gracie and Jack as reimbursement for their reasonable and proper expenses subject to attack?
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