Seton Hall University Wilma Case Study – Assignment Help

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Fred and Wilma are directors of Sabbulonarium Corporation (SC), a gravel pit. Wilma is also the President. Barney, an attorney, has performed legal work for SC for twelve years. Recently, Barney and Betty were made directors of SC. SC has a seven-person board of directors. Prior to becoming an SC director, Betty had entered into a valid written contract with SC to sell a parcel of land to SC for $2,500,000. SC planned to build a retail store on the parcel.

After becoming a director, Betty learned confidentially that her parcel of land would appreciate in value if she held it for a few years because it was located next to a planned mall development. At dinner at Barney’s home, Betty told Barney about the planned mall development. Betty asked for, and obtained, Barney’s legal opinion about getting out of her contract with SC. Later, based on Barney’s suggestions, Betty asked Wilma to have SC release her from the contract. She did not explain, nor did Wilma inquire about, the reason for her request. Wilma then orally released Betty from her contract with SC.

The next regular SC board meeting was attended only by Wilma, Fred, and Barney. They passed a resolution to ratify Wilma’s oral release of Betty from her contract with SC. Barney never disclosed what Betty had told him about the proposed mall development. Three years later, Betty sold her parcel of land for $3,850,000 to BamBam Corporation, which then resold it for $4,375,000 to SC.

Part 1:

Was Wilma’s oral release of Betty effective? Discuss.

Part 2:

Did Betty breach any fiduciary duty to SC? Discuss.

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