301 Minn. 207, 222 N.W.2d 71 (1974)
Oscar M. Miller, a minority shareholder of Miller Waste Mills, Inc., initiated a shareholder's derivative action against his brothers Rudolph W. Miller and Benjamin A. Miller and several corporations they owned and controlled.1 The suit sought to recover assets and profits of the defendant corporations, which the plaintiff alleged had been wrongfully diverted from Miller Waste. The defendant corporations included Unit Manufacturing Company, Filter Supply Corporation, Miller-Felpax Corporation, Miller Lubricator Company, Fiberite Corporation, and Melamine Plastics Corporation. Following a lengthy trial by the court without a jury and the denial of post-trial motions, the trial court entered judgment dismissing the complaint, from which Oscar appealed.2
The Miller family business originated in the 1890s when Joseph Miller established a general scrap business in Winona, Minnesota, dealing in metals, hides, paper, rags, and other reclaimable materials.3 In 1923, Joseph purchased a waste puller machine to enter the waste business, which involved buying rags and waste threads from brokers and textile mills for processing into packing waste and wiping waste sold mainly to railroads.4 The business was incorporated in 1927 as Miller Waste Mills, Inc., with initial shareholders including Joseph, Jennie, Oscar, and Rudolph.5 Oscar terminated his relationship with the corporation in 1932 and moved to New York City to work as a securities analyst, while Benjamin joined the business around that time.6
In 1940, Joseph retired at age 75 due to ill health, leading to an extensive reorganization of Miller Waste.7 Rudolph and Benjamin acquired majority ownership and active management of the corporation.8 Joseph and Jennie executed a joint will providing for the distribution of shares to their other children, including a remainderman's interest for Oscar in 34 shares.9 Agreements were executed assigning a 45-percent interest in felpax lubricator patents to Joseph in exchange for payment of Rudolph's debt and obligating Rudolph and Benjamin to make weekly payments to their parents.10 After the reorganization, Rudolph and Benjamin controlled Miller Waste as officers and directors.11
During World War II, Miller Waste encountered difficulties fulfilling government contracts that required small 5- to 7-pound packages of waste, as its operations were geared toward high-volume baled waste.12 In 1943, Rudolph, Benjamin, and their wives formed Unit Manufacturing Company to handle the small packaging business, which was transferred from Miller Waste along with wiper cloth packaging, mop manufacturing, and a welding business.13 Unit expanded into manufacturing filter element socks and cartridges.14 The partnership was later transferred to Filter Supply Corporation, incorporated in 1951.15 Rudolph also pursued development of the felpax lubricator through Miller-Felpax Company, incorporated in 1947, and the Miller lubricator through Miller Lubricator Company, incorporated in 1953.16
In 1948 and 1952, Rudolph and Benjamin formed Fiberite Corporation and Melamine Plastics Corporation to manufacture plastic molding compounds, with Miller Waste supplying cotton cuttings as filler material.17 A plastic trading division was added to Miller Waste in 1960.18 All transactions between Miller Waste and the defendant corporations were conducted at prices equal to or higher than those with unrelated customers, providing Miller Waste with a captive market for its products.19 The purposes and operations of the defendant corporations were disclosed to family members, including Jennie Miller, who served on the board of Fiberite until 1956.20 The trial occurred in 1971, resulting in dismissal of the complaint and this appeal.
Whether defendants Rudolph W. Miller and Benjamin A. Miller appropriated business opportunities properly belonging to Miller Waste Mills, Inc.?21
Under the corporate opportunity doctrine, a managing officer or director occupies a fiduciary relationship to the corporation and may not exploit his position by appropriating to himself a business opportunity properly belonging to the corporation.22 Courts determine whether an opportunity is corporate by applying a flexible line of business test that examines whether the opportunity is of sufficient importance and closely related to the existing or prospective activity of the corporation, considering factors including the corporation's interest or expectancy, the relationship to the corporation's business purposes and current activities, whether the opportunity embraces areas adaptable to the corporation's business, the competitive nature of the opportunity, the corporation's financial ability to acquire it, and whether the corporation has fundamental knowledge, practical experience, facilities, equipment, personnel, and the ability to pursue it.23 If the opportunity is corporate, liability should not be imposed upon the acquiring officer if the evidence establishes that his acquisition did not violate his fiduciary duties of loyalty, good faith, and fair dealing toward the corporation.24
No. The trial court found with ample evidentiary support that the businesses of Melamine Plastics Corporation, Fiberite Corporation, Miller Lubricator Company, Miller-Felpax Corporation, and the manufacture of filter element cartridges by Filter Supply Corporation were not in the line of business of Miller Waste.2526 The transfers to Unit Manufacturing Company of the small packaging business, mop manufacturing, and welding business were made in good faith, ratified by the then officers and shareholders, and benefited Miller Waste by establishing a captive market for its products at prices equal to or higher than those charged unrelated customers without using or exploiting corporate assets.27 Rudolph and Benjamin disclosed the purposes and operations of the defendant corporations to all officers and shareholders including their mother Jennie, who served on the board of Fiberite until 1956.28 They devoted their best efforts to Miller Waste while developing new lines of business for it such as the sale of cotton cuttings and the plastic trading division.29
These facts establish that the defendants discharged their fiduciary duties and did not wrongfully appropriate any corporate opportunities.30
The defendants did not wrongfully appropriate to defendant corporations or to themselves any corporate opportunities belonging to Miller Waste, and the trial court's judgment dismissing the complaint is affirmed.31