God help the directors of this company! The enterprise known as Bible.com Inc. is facing a shareholder lawsuit for failing to make enough money out of the website. According to a story on the Reuters newswire and making the rounds of other websites, broadcasters and newspapers, James Solakian acquired a 28 per cent shareholding in the company to settle a debt. But the other owner-directors rebuffed his idea that Bible.com was sitting on virtual real estate that worth perhaps $100 million. Now directors Roy Spencer Miller, Betty Miller, Andrew Miller, Stacy Fornara, Edward Cude and Michael Magnant as well as the company itself face a suit in Delaware Chancery Court for breach of duty. They should develop the site or sell it, not just let it sit fallow, he contends.
Whose law holds: God's or man's? The Chancery Court will decide. Delaware – the tiny state that owing to its management-friendly laws is home to about half the corporations in America – is home to the famous business judgement rule that prevents shareholders from winning suits against directors just because they disagreed with strategy. The legitimacy of the business judgement rule ought to protect the directors from this action. But it's not clear the court will agree that business judgement has been exercised in this case. Getting a trickle of advertising and selling a few bibles from the site may be what the directors think God wants. But it's not the size of business that Solakian thinks it could be with a more evangelical-entrepreneurial bent. Are directors duty-bound to make as much money as they can? Are there higher callings?
Source document: The Reuters news story gives a nice spin to the tale, though others may wish to twist it further. The court documents are available through the LexisNexis File & Serve service.
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