Joan sits on the directors board for ManBank. Bob her friend wants a business loan of $300 million to start a new airline. Joan does the research and finds that Bill has worked as an assistant regional manager for a Midwestern airline for 12 years, and that under Bob’s watch the company increased sales 28%. Joan recommends to the board that they grant Bob the loan in which they do. After 3 years Bob files bankruptcy and the bank can only reclaim $150 million. They shareholders seek to file a derivative law suit against Joan for breach of fiduciary duty of care. The questions here is Joan’s conduct protected by the business judgment rule and if so how likely are the shareholders going to be able to succeed successfully with the law suit.

Federal Rule 23.1(a) states that this rule applies when one or more shareholders or members of a corporation or an unincorporated association bring a derivative action to enforce a right that the corporation or association may properly assert but has failed to enforce. The derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of shareholders or members who are similarly situated in enforcing the right of the corporation or association. USCS Fed Rules Civ Proc R 23.1

The business judgment rule, a well-established doctrine of corporate law, "bars judicial inquiry into actions of directors taken in good faith and in honest pursuit of the legitimate purposes of the corporation.
Abramowitz v. Posner, 513 F. Supp. 120, 125 (S.D.N.Y. 1981)

New York's business judgment rule creates a presumption that a corporation's directors act in good faith and in the best interests of the corporation. (A presumption of propriety inures to the benefit of directors."); Banque Nationale de Paris S.A. Dublin Branch v. Ins. Co. of North Am., 896 F. Supp. 163, 165