Article by Justin Beber and Robert Vaux
The "business judgment rule" has long stood for the proposition that courts should not seek to second-guess the business decisions of directors, who are assumed to be in a better position to understand the business of the corporation and to guide its affairs. The limits of this protection of corporate decision-making have been explored in a decision of the Ontario Superior Court of Justice.
Background
The decision in UPM-Kymmene Corporation v. UPM-Kymmene Miramichi Inc. was recently released. In that decision, Madame Justice Lax set aside an employment contract between a successor corporation to Repap Enterprises Ltd. ("Repap") and Steven Berg, Repap’s former Senior Executive Officer and the Chairman of its board of directors.
