Brief Fact Summary. Plaintiff, William Shlensky, filed a derivative action against Defendant director, Phillip Wrigley, to force the installation of lights for night baseball.
Synopsis of Rule of Law. A court will not interfere with an honest business judgment absent a showing of fraud, illegality or conflict of interest.
Under this rule, the judgment of the directors of corporations enjoys the benefit of a presumption that it was formed in good faith and was designed to promote the best interests of the corporation they serve.View Full Point of Law
Issue. The issue is whether the court should overrule decisions made by Defendant absent a showing of fraud, illegality or a conflict of interest.
Held. The court will not overturn Defendant’s decision to not install lights at the ballpark. The court cited some reasons why the light installation could be detrimental, such as lowering the property value of the park itself, a lack of proof on behalf of Plaintiff that financing would be available for lights and would be certain to be offset by increasing revenues. The court cites precedent that asserts that business decisions should not be disturbed just because a defendant can make a reasonable case that the policy chosen by the company may not be the wisest policy available.
Discussion. The court notes that they were not necessarily agreeing with Wrigley’s position in refusing to install lights, but that there was some reasons for doing so. The court stated that there was no requirement to show all three factors of illegality, fraud or a conflict of interest, but there was not evidence of any of the above in this case.