Question

Clean Earth, Inc. is a Delaware benefit corporation that produces cleaning products using 100 percent recycled, organic, and sustainably produced materials. Several years ago, it became a socially conscious organization and has fulfilled all of the reporting requirements since then. Clean Earth executives have decided to purchase its paper product supplies (such as napkins and toilet paper) from a new supplier, who plants two trees for every tree it uses. Since this supplier charges five times more than Clean Earth's previous supplier, profits from Clean Earth's paper products are expected to be cut in half. If a Clean Earth shareholder challenges the decision as being unfair to shareholders, how will a court likely rule

Answer 1

Answer: The court will likely rule against the shareholders, as long as Clean Earth has acted in responsible and a sustainable manner.

Step-by-step explanation:

From the question, we are informed that Clean Earth"s new supplier charges five times more than the supplier, and this will lead to the reduction in profits.

If a Clean Earth shareholder challenges the decision as being unfair to shareholders, a court will likely rule against the shareholders, as long as Clean Earth has acted in responsible and a sustainable manner.