Shapiro v. Greenfield
Court of Special Appeals of Maryland
764 A.2d 270 (2000)
Charles Shapiro, CEO and director of College Park Woods (along with fellow directors Joan Smith and Michael Shapiro, all defendants), led the corporation into conveying its unprofitable shopping-center property to a joint venture — in which Shapiro personally held a large interest — in exchange for a 50% ownership stake in that venture, with shareholder approval obtained after full notice and a special meeting, though shareholders Marvin and Betty Greenfield (plaintiffs) didn't attend. After being denied access to some corporate records, the Greenfields sued, alleging Shapiro usurped a corporate opportunity; the trial court agreed, finding the transaction unfair to the corporation and that no directors were disinterested, and the board members appealed.
Whether a director is an interested director with regard to a particular transaction if he does not stand to personally benefit from the transaction, but due to a personal relationship with a party with a direct interest, it would reasonably be expected that the director's exercise of independent judgment would be compromised.