News & Analysis as of

Directors’ Alleged Breach Of Fiduciary Duty Not Subject To Anti-SLAPP Statute

A SLAPP is a strategic lawsuit against public participation. California enacted Code of Civil Procedure Section 425.16 as an antidote to SLAPP suits. In general, a SLAPP is subject to a special motion to strike unless the...more

U.S. Supreme Court To Decide Whether Companies And Directors Can Be Held Liable For False Opinions Or Beliefs In Registration...

On March 3, 2014, the United States Supreme Court granted certiorari to review the Sixth Circuit’s decision in Indiana State District Council of Laborers v. Omnicare, 719 F.3d 498 (6th Cir. 2013), to determine whether an...more

ISS Opposes Director Compensation Bylaws

On January 13, ISS released FAQs expressing its views on a board’s adoption of director compensation bylaws. To counteract the increasing practice implemented by hedge funds and other dissident shareholders of paying their...more

Perspectives - January 2014

In This Issue: - Considerations in the Cloud: Managing the Risks - United States V. Sperry: A Revived Threat to Owners, Directors, Managers and Directors of Distressed Organizations - Board Membership &...more

Just Who Is Behind The Universal Proxy?

Recently, it was reported that the Council of Institutional Investors had submitted a petition for rule making to the Securities and Exchange Commission. Indeed, the CII did submit this petition on January 8, 2014. ...more

Two Certified Issues to the Georgia Supreme Court Will Address Application of the Business Judgment Rule to Bank Officers and...

In an unexpected turn of events, two recent cases arising out of the U.S. District Court for the Northern District of Georgia have resulted in two sets of certified questions to the Georgia Supreme Court that will likely have...more

Delaware Court Limits Section 220(d) Books and Records Inspections to Current Directors

The Court of Chancery of the State of Delaware strictly held that a non-stockholder and alleged former director was not entitled to inspect a Delaware corporation’s books and records as a matter of right under Delaware Code...more

King v. DAG SPE Managing Member, Inc., C.A. No. 7770-VCP (Del. Ch. Dec. 23, 2013) (Parsons, V.C.)

In this memorandum opinion, the Court of Chancery dismissed an action under Section 220 of the Delaware General Corporation Law brought by a former director to inspect a corporation’s books and records. The Court found that...more

The Business Judgment Rule

Canadian Courts, like their American counterparts, have developed a rule of deference to business decisions called the “business judgment rule”, whereby courts will defer to the directors’ business judgment as long as an...more

Director Tenure Draws Increasing Investor Attention

The Wall Street Journal recently highlighted director tenure in an article titled “The 40-Year Club: America’s Longest Serving Directors.” While the article noted that fewer than 30 public company directors have at least 40...more

Changing Healthcare Landscape Poses Challenges for Directors

Despite the continuing legal challenges and political hardball, as well as the delays and technical glitches, it appears that the Patient Protection and Affordable Care Act, more commonly known as Obamacare, is here to stay. ...more

Executive Compensation Considerations for 2014

Executive compensation is a topic that just won’t go away, particularly with pay disparity and pay for performance regulations still looming. We highlight below some of the matters directors should be considering as they...more

Dodd-Frank Essentials: Executive Compensation Requirements And Disclosures

Several provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act have brought compensation of financial institution executives into the public eye. Although disclosure of executive and director compensation...more

And On The 12th Day Of Privacy, Something For Directors…..Mind The Gap!

On our last “day of Privacy”, we have a little extra (perhaps a lump of coal….) post: in 2014, cyber risk has been elevated to a board issue – read on and forward to your favorite company director! As we have discussed...more

Growing Demands of Compliance Oversight Weighing Down Directors

Constantly changing and overlapping legislative and regulatory requirements are weighing down corporations and usurping more and more board time. It is a telling sign when, according to a recent survey, directors ranked...more

North Carolina Supreme Court Addresses Duties of Corporate Directors

On November 8, 2013, the North Carolina Supreme Court issued a rare opinion addressing the duties of corporate directors and reaffirming that those duties are generally owed only to the corporation itself rather than the...more

“Wherever You Go, There You Are”, But Will You Be In The Proper County?

The California General Corporation Law makes numerous references to the “proper county”. For example, Corporations Code Section 304 empowers the superior court of the proper county to remove a director in specified...more

Top 10 Topics for Directors in 2014

Top 10 Topics for Directors in 2014 - U.S. public companies face a host of challenges as they enter 2014. Here is our list of hot topics for the boardroom in the coming year: 1. Oversee strategic planning amid...more

D&O Questionnaire Update Forms For 2014

The SEC has adopted rules prohibiting “bad actors” from using Rule 506 after September 23, 2013 (the effective date of the rules), or if prohibited conduct occurred prior to the effective date of the rules, the prohibition...more

FDIC Bars Financial Institutions from Purchasing Insurance Coverage for Civil Monetary Penalties for Directors and Officers: FDIC...

We recently notified you of the FDIC’s Financial Institution Letter 47-2013 , which urges directors and officers of financial institutions to examine their institutions’ directors and officers (D&O) insurance coverage to...more

New Bill Gives California Hospital and Corporate Boards Emergency Powers in Events of Disaster

California hospitals and corporations will soon be able to adopt bylaws that make it possible for the governing board to make business decisions in the absence of a quorum during an emergency. Effective Jan. 1, 2014, and...more

Canmore Consultants Ltd. v. L.O.M. Medical Int'l, Inc.: A Limited Exception To Directorial Authority To Fill Board Vacancies

Canmore Consultants Ltd. v. L.O.M. Medical International, Inc. 8 Del. C. § 223(c): A Limited Exception To Directorial Authority To Fill Board Vacancies - Section 223(c) of the Delaware General Corporation Law (the...more

An Unexpected Impasse

If a corporation has four directors and two shareholders, one owning 60 shares and the other owning 40 shares, it seems obvious that the majority shareholder should be able to elect a majority of the board of directors. ...more

Deadlocked But Not Out Of Options

While not prohibited by the General Corporation Law, a board comprised of an even number of directors suffers from one potential disability. It can become deadlocked. When that unfortunate situation arises, there are...more

The Challenge for Boards

Public company boards have experienced real turbulence for the better part of five years. Some of this turbulence is the product of internal dynamics — the need to improve liquidity, strengthen balance sheets and cut costs....more

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