Georgia Legislature Acts to Nullify Georgia Supreme Court’s Decision in FDIC v. Loudermilk -

After passing both the Georgia House of Representatives and the Georgia Senate, House Bill 192 is awaiting the signature of the Governor to become law. House Bill 192 will amend the Georgia Corporate Code to codify the business judgment rule applicable to directors and officers of Georgia corporations, including financial institutions. In addition, the language of House Bill 192 provides that the operative liability standard for directors and officers is gross negligence (as opposed to simple negligence under FDIC v. Loudermilk). These changes, if signed into law, will confirm that the business judgment rule is alive and well in Georgia.

Amendment Language -

Among other changes, House Bill 192 will insert language into the Georgia Corporate Code codifying that “[t]here shall be a presumption that the process [a director/an officer] followed in arriving at decisions was done in good faith and that such [director/officer] has exercised ordinary care; provided, however, that this presumption may be rebutted by evidence that such process constitutes gross negligence by being a gross deviation of the standard of care of [a director/an officer] in a like position under similar circumstances.