Diana a minority shareholder in beta complains to beta board

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Reference no: EM1375518

Arnold is a director as well as the majority shareholder of Beta Investments Corporation. Arnold buys for $1,500 an option to purchase a tract of real estate for $50,000. Arnold forms a new corporation, Commercial Property Inc., to hold the option. As the mainstream shareholder, and therefore controlling director, of Beta Arnold orders Beta to authorize the purchase of the land from Commercial Property for $100,000. Arnold then has Commercial Property buy the land as well as sell it to Beta and loan the money to Beta for the purchase at a 10 percent interest rate. Diana a minority shareholder in Beta complains to Beta's board which takes no action. Diana files a suit against Arnold on Beta's behalf. Will Diana prevail? Why or why not?

Reference no: EM1375518

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