What duties do directors and officers owe to a corporation

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Question

First Niles Financial, Inc., is a company whose sole business is to own and operate a bank, Home Federal Savings and Loan Association of Niles, Ohio. First Niles' directors include bank officers William Stephens, Daniel Csontos, and Lawrence Safarek; James Kramer, president of an air-conditioning company that services the bank; and Ralph Zuzolo, whose law firm serves the bank and whose title company participates in most of its real estate deals. First Niles' board put the bank up for sale. There were three bids. Farmers National Bank Corp. stated that it would not retain the board. Cortland Bancorp indicated that it would terminate the directors but consider them for future service. First Financial Corp. said nothing about the directors. The board did not pursue Farmers' offer, failed to respond timely to Cortland's request, and accepted First Financial's bid. Leonard Gantler and other First Niles shareholders filed a suit in a Delaware state court against Stephens and the others. What duties do directors and officers owe to a corporation and its shareholders? How might those duties have been breached here? Discuss.

Reference no: EM133935365

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