El Capitan Precious Metals Inc (ECPN)

[Pan4Au]

Duty of loyalty issues may arise in the context of a variety of transactions, including the following:

1. Sales to or purchases by the corporation from directors or entities
in which the directors have an interest;
2. Dealings between a parent corporation and its subsidiary;
3. Unfair treatment of minority stockholders by a majority stockholder
in matters such as corporate acquisitions and reorganization
transactions;
4. Use of corporate funds to perpetuate control;
5. Sale of control;
6. Demands of stockholders to commence derivative suits;
7. Excessive compensation;
8. Insider trading;
9. Usurpation of corporate opportunities;
10. Competition with the corporation by officers or directors; and
11. Improper use of corporate position, property, or information.14

The question of whether a director has breached a duty of loyalty generally may arise if it is shown that the director has an interest in the transaction at issue. Directors are typically considered to be “interested” if they “appear on both sides of a transaction” or if they “expect to derive personal financial benefit from it in the sense of self-dealing, as opposed to a benefit that devolves upon the corporation or all stockholders generally.

https://apps.americanbar.org/abastore/products/books/abstracts/5310344_chap1_abs.pdf