Shlensky v. Wrigley
95 Ill.App. 268, 237 N.E.2d 776 (Ill.App. 1 Dist. 1968)

  • Wrigley was the majority shareholder in a corporation that owned a baseball team in Chicago and its associated stadium. Unlike most other teams in the league, Chicago did not have lights in their stadium to allow for games to be played at night.
    • Night games often had significantly higher attendances than day games.
  • Shelnsky, a minority shareholder, sued, claiming that Wrigley was in breach of his fiduciary duty by failing to install lights.
    • Shelnsky argued that Wrigley didn’t allow lights not because of a legitimate business reason, but because he had a personal opinion that baseball should only be played during the daytime.
      • Shelnsky also argued that the other directors acquiesced to Wrigley even though they knew the decision made no business sense.
    • Wrigley argued that there was no allegation of fraud, illegality, or conflict of interest, so the courts should stay out if it because of the Business Judgment Rule.
      • The Business Judgment Rule says that the courts should not second guess business decisions made by directors.
  • The Trial Court found for Wrigley. Shelnsky appealed.
  • The Appellate Court affirmed.
    • The Appellate Court found that there must be fraud, or a breach of good faith that with directors are bound to exercise towards the stockholders in order to justify the courts entering into the internal affairs of corporations.
    • The Court found that Wrigley’s decision to not play baseball at night was not fraud or breach of good faith, so it was covered by the Business Judgment Rule.