This section contains the nature of the case and procedural background.

Liberty Starters Corporation (Liberty) manufactured starters for Ford Motor Company. D was a corporate director of Liberty from October 1919 until June 1920. D was friends with Maynard, who was the President. Liberty went out of business in 1921. P was appointed as receiver. P sued D alleging a breach of his director's duties. P claimed that D did not pay any attention to waste and the incompetence of employees. There had been two directors' meetings. D missed one because of the death of his mother. D did not independently learn about Liberty but had been informed by Maynard. D did no further investigation, nor had he even questioned Marynard's information. D got the verdict, and P appealed.

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