Fiduciary Duties

Jimmy is the CEO of News Corp. His son, Johnny, runs Television Inc.  One day Jimmy suggests that Johnny sell Television Inc. to News Corp.   Jimmy and Johnny work together to radically inflate the value of Television Inc. Jimmy brings a proposal to the Board of Directors to buy Television Inc. for $500 million dollars even though the corporation is only worth $2 million.  The board of directors diligently examines the transaction, but due to clever forgeries, the board does not discover the radical inflation of the corporation.   Jimmy never discloses his relationship with Johnny.  The sale goes through, and it is shortly discovered that Television Inc., is practically worthless. 

A shareholder sues alleging that Jimmy violated his fiduciary duty of loyalty.  
Additionally, the shareholder claims that the directors violated their fiduciary duties of care.  
Is the shareholder correct? 

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Write between 500 – 750 words (approximately 2 – 3 pages) using Microsoft Word.
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Reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) must be identified in the paper and listed on a reference page.Reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) must come from sources such as, scholarly journals found in EBSCOhost, online newspapers such as The Wall Street Journal, government websites, etc.  Sources such as Wikis, Yahoo Answers, eHow, etc. are not acceptable. 

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