Corporations Keyed to Klein
Bayer v. Beran
Facts
Defendants are the directors of Celanese Corporation of America. Celanese is a product that is similar to rayon, but the corporation makes the effort to distinguish the two in order to generate a market for their products. When the Federal Trade Commission (FTC) ruled that celanese would need to be designated as rayon, there was a need to expend more resources to make the distinction between celanese and competing products. The former advertising budget was $683,000 per year, but the president (who is also a director), Dr. Camille Dreyfus, suggested a $1 million radio campaign built around a radio musical program. One of the stars of the program is also his wife. The Board approved the campaign, and it has subsequently been renewed. The Board also continues to approve an employment agreement for Dr. Camille Dreyfus’ brother, Dr. Henri Dreyfus, who was a co-founder with his brother of the technology behind the company’s products. Henri does not participate in the company as actively as Camille, but the agreement prevents him from working elsewhere.
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