Farber v. Servan Land Company, Inc.

Servan Land Company (Servan) (defendant), a golf-course venture, was run almost entirely by its president Serianni, the only active director, along with fellow investor Savin; the two together owned a majority of Servan stock. After Servan bought its original golf-course land plus an additional 20 adjoining acres, a seller offered Servan the chance to buy another adjoining 160-acre tract for a second course. Stockholders discussed the offer at a meeting but never voted on it, and the following year Serianni and Savin bought the 160 acres for themselves personally. Years later, they and Servan sold both tracts together, with all stockholders except Jack Farber (plaintiff) approving the sale. Farber brought a derivative suit alleging Serianni and Savin breached their fiduciary duty by taking the corporate opportunity for themselves; the district court ruled for the defendants on three grounds: no corporate opportunity existed, Servan had rejected it anyway, and the stockholders later ratified the purchase.