Fliegler v. Lawrence

John Lawrence, president of Agau Mines (Agau), acquired a lease option that Agau's board decided not to pursue directly; Lawrence and other Agau directors instead formed United States Antimony Corporation (USAC), which took the lease option and granted Agau a long-term option to buy USAC later. When Agau's board later exercised that purchase option, a majority of Agau's total shareholders approved it, but a majority of the shares actually voted were held by directors who sat on both Agau's and USAC's boards, with only about a third of disinterested shareholders voting at all. Shareholders brought a derivative suit against the USAC officers and directors for usurping a corporate opportunity belonging to Agau; the lower court ruled for the defendants, and the plaintiffs appealed.