Boland v. Boland Trane Associates, Inc.

Boland Trane Associates (defendant) was a family business owned by eight siblings, three of whom were directors who obtained additional stock through several transactions. Two non-director siblings, John and Kevin Boland (plaintiffs), made a litigation demand; the company appointed a special litigation committee (SLC), which found the transactions appropriate. The Bolands brought a derivative suit for self-dealing and breach of fiduciary duty. On summary judgment, the company did not disclose how it chose the SLC or that its members were free of conflicts, and the SLC gave its methodology without justifying it. The circuit court granted summary judgment presuming reasonableness; the intermediate court affirmed, and the plaintiffs appealed.

Whether a special litigation committee is entitled to a presumption that it acted in good faith, was independent, and followed reasonable procedures.