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

The shareholders of Celanese (P) filed a derivative suit against the directors of the Celanese Corporation (D). They alleged a breach of the duty of loyalty to shareholders because Miss Jean Tennyson, the wife of the CEO, was hired to sing in radio advertisements for the company. The advertisements cost about one million dollars per year. The plaintiffs allege that the CEO was motivated by non-corporate purposes and that he wished to subsidize the career of his wife rather than further the interests of the corporation.

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