Guam § 28817 - Standards of Liability for Directors.

§ 28817. Standards of Liability for Directors.

(a) A director shall not be liable to the corporation or its shareholders

for any decision to take or not to take actions, or any failure to take any

action, as a director, unless the party asserting liability in a proceeding

establishes that:

(1) any provision in the Articles of Incorporation authorized by §

28202(b)(4) or protection afforded by § 28861 for action taken in

compliance with §§ 28862 or 28863, if interposed as a bar to the

proceeding by the director, does not preclude liability; and

(2) the challenged conduct consisted or was the result of:

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(A) action not in good faith; or

(B) a decision

(i) which the director did not reasonably believe to be in

the best interest of the corporation, or

(ii) as to which the director was not informed to an

extent the director reasonably believed appropriate in the

circumstances; or

(C) a lack of objectivity due to the director’s familial,

financial or business relationship with, or a lack of independence

due to the director’s domination or control by, another person

having a material interest in the challenged conduct

(i) which relationship or which domination or control

could reasonably be expected to have affected the director’s

judgment respecting the challenged conduct in a manner

adverse to the corporation, and

(ii) after a reasonable expectation to such effect has been

established, the director shall not have established that the

challenged conduct was reasonably believed by the director

to be in the best interest of the corporation, or

(D) a sustained failure of the director to devote attention to

ongoing oversight of the business and affairs of the corporation, or

a failure to devote timely attention, by making (or causing to be

made) appropriate inquiry, when particular facts and

circumstances of significant concern materialize that would alert a

reasonably attentive director to the need therefore; or

(E) receipt of a financial benefit to which the director was not

entitled or any other breach of the director’s duties to deal fairly

with the corporation and its shareholders that is actionable under

applicable law.

(b) The party seeking to hold the director liable:

(1) for money damages, shall also have the burden of establishing

that:

(A) harm to the corporation or its shareholders has been

suffered, and

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(B) the harm suffered was proximately caused by the

director’s challenged conduct;

(2) for other money payment under a legal remedy, such as

compensation for the unauthorized use of corporate assets, shall also

have whatever persuasion burden may be called for to establish that the

payment sought is appropriate in the circumstances; or

(3) for other money payment under an equitable remedy, such as

profit recovery by or disgorgement to the corporation, shall also have

whatever persuasion burden may be called for to establish that the

equitable remedy sought is appropriate in the circumstances.

(c) Nothing contained in this Section shall

(1) in any instance where fairness is at issue, such as

consideration of the fairness of a transaction to the corporation under §

28861(b)(3), alter the burden of proving the fact or lack of fairness

otherwise applicable,

(2) alter the fact or lack of liability of a director under another

section of this Act, such as the provisions governing the consequences

of an unlawful distribution under §28818 or a transactional interest

under § 28861, or

(3) affect any rights to which the corporation or a share holder

may be entitled under another statute of this territory or the United

States.