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View Diary: Sen. Elizabeth Warren gives thumbs down to AIG's possible suing of taxpayers for bailing it out (125 comments)

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    Creosote

    There's a strong presumption that decisions by directors that are unaffected by conflict of interest are non-actionable by shareholders (this is the "business judgment rule").

    But it's a presumption, not a conclusion, and as such can be overcome: a truly terrible decision that prejudices the interests of the shareholders can result in liability for the directors, even if they "decide the suit is not in the corporate interest."

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