Charles HEIT, Plaintiff, v. W. H. BIXBY et al., Defendants, 276 F. Supp. 217

Summary

In derivative action, plaintiff stockholder sued, on behalf of corporation, defendant directors, officers, and defendant management company for secret commissions paid to two defendant directors from fee charged by defendant management company to corporation for managing subsidiaries. Some individual defendants filed cross-claim against the two defendant directors for indemnity based on latters' assurances of fair dealing. Court held that all individual defendants and defendant management company were liable jointly and severally to plaintiff for secret commissions. However, individual defendants, other than the two defendant directors, were liable only according to their tenures as directors during suit period. Cross-claimants were entitled to indemnification against cross-defendants. Directors of corporation had duty to manage corporation, and it was negligence for directors to leave management of corporation entirely up to others. Entrusting directors were held liable for breaches ...