Harold Hitz Burton

“ As long as a corporation enjoys the healthy status of a going concern, its directors generally may invest freely in its securities without accountability for their resulting profits. Their directorships should make them accountable for such profits when their personal interests as purchasers of securities may conflict with their obligations as directors. [2] A mere excess of a corporation's liabilities over its assets may not subject its directors to this accountability. ”

“ While corporate directors are not classed as express trustees, their obligations to their respective corporations are fiduciary in character. The more precarious the condition of the corporation, the more it needs the undivided loyalty of its directors. Conflicts of interest must be resolved in its favor. An example of the need for doing so arises whenever, in the face of a prospect of the corporation's liquidation, some of its directors invest in its notes at a substantial discount. An inherent conflict of interests is thereby created. ”