Luke is a director of Motor Parts Corporation. Luke makes decisions with respect

Question

Luke is a director of Motor Parts Corporation. Luke makes decisions with respect to Motor Parts in good
faith, in what he thinks is the firm’s best interest, and without violating any duties owed to it. Despite
these circumstances, Luke exercises really poor management judgment causing Motor Parts big financial
losses and a reduction in market share. Under the business judgment rule Luke is
a. immune from liability
b. liable only to the extent that he gains as a result
c. liable only to the extent that Motor Parts suffers as a result
d. wholly liable

Explanation / Answer

c)

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