Business Judgement Rule Case Study

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How Do Wisconsin Courts Treat the “Business Judgement Rule”
According to one online source, the Business Judgement Rule is “A legal principle that makes officers, directors, managers, and other agents of a corporation immune from liability to the corporation for loss incurred in corporate transactions that are within their authority and power to make when sufficient evidence demonstrates that the transactions were made in Good Faith.” (farlex, n.d.).
After examining several cases in which the Business Judgement Rule has been involved here in the state of Wisconsin, one would observe that it has been used successfully as a defense in many criminal cases. Most court cases I was able to find that were tried in Wisconsin courts seemed to rule in favor of the …show more content…
The most recent of which, Data Key Partners v. Permira Advisers LLC, illustrates that prosecutors have a tremendous burden of proof to overcome and must sometimes elevate their cases as high as state Supreme Courts in order to overcome the rule.
Other cases that prove Wisconsin courts tend to rule in favor of the Business Judgement Rule are Reget v. Page and Einhorn v. Culea. In both of the aforementioned cases, one involving “excessive” compensation and the other involving stock dilution, the Business Judgement Rule proved to be a successful defense. Some other cases I was able to briefly glance at seemed to establish the same high burden of proof for prosecutors to overcome.
Would You View The “Business Judgement Rule” Differently As A Judge?
If I were a judge, I would likely set the same high burden of proof Wisconsin courts have set for those attempting to prove that a board/chief officer acted criminally. I would make sure I evaluated each cased individually and rule based on the individual fact situations of each

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