When considering suing Holmes, the shareholder can use a number of theories. One theory which can
be used is the corporate opportunity doctrine. In this case although Holmes did give the board of
directors a chance to purchase the business, but it seems as if he did not wait long enough. The board
did not make a decisive decision whether to purchase the business or not. They were split which means
the decision was not yet made. Furthermore, Holmes did not inform the board that he was going to
purchase the business himself. Under the corporate opportunity doctrine, being president of a similar
public corporation, he must disclose all private business dealings and purchases with his board.
A second theory the board member can use is the Duty of Candor, under this the director has a duty to
disclose the board “fully and fairly” of the business dealing. Clark Holmes did not do this as he never
disclosed that if the board does not purchase the company he will. It matters that Holmes purchased
pro-providers nursery school into an after-school program as he will now be competing with the
company he is currently President of. Holmes is forming a conflict of interest and the purchase of the
Pro Provider nursery is illegal especially if Holmes has plans to make it an after-school center.