Tri R Angus, Inc., a closely held corporation, was owne 80 percent by Jon and Fa

Question

Tri R Angus, Inc., a closely held corporation, was owne 80 percent by Jon and Fances Neiman, who were also directors of Tri R Angus. Troy Neiman and Carol Lewis owned 12 percetn of Tri R Angus's shares. Troy an Carol asked a court to remove Jon and Frances as diectors of the corporation on the grounds that they authorized Tri R Angu to distribute its assets in violation of state law, inappropriately mortgaged or sold corporate assets, misused corporate earnings, and wasted corporate assets. Jon an Frances denited the allegations. At trial, Troy and Carol entered as evidence pleadings from other actins against Jon and Frances and intrduced no objective evidence of currnet conduct by Jon or Frances What standard of misconduct did the court require Troy and Carol to prove in order to remove Jon and Frances? Did the court find they had proced their case?

Explanation / Answer

Answer:

In order to remove Jon and Frances the court require Troy and Carol to prove that the standard of misconduct by stating with particular facts that give rise to a strong inference about defendant’s acted with the required state of mind because the court believed that the defendant's state of mind is difficult to prove. Troy and Carol must provide evidence that will prove that director appellants engaged were involved fraudulent conduct.

It is important that the prohibited conduct must be proved in the court, and it must be supported with evidence that removal of a director will be in the best interests of the Tri R Angus, Inc.

The Trial court did not find that they had proceeded the case. However, district court erred when it granted appellees that the cause is remanded for further proceedings.

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