News & Analysis as of

Board of Directors Exculpatory Clauses

Wilson Sonsini Goodrich & Rosati

Officer Exculpation and the Silicon Valley 150: Year Two

Last year, we reviewed proxy statements filed by companies in the Silicon Valley 150 (SV150) to see whether they included an officer exculpation proposal in their proxy statements for stockholder meetings held from August 1,...more

Mayer Brown

Developments and Trends in Delaware Officer Exculpation Charter Amendments

Mayer Brown on

In August 2022, the Delaware General Assembly amended the Delaware General Corporation Law (“DGCL”) to allow corporations to adopt charter provisions exculpating certain officers from personal liability for monetary damages...more

Mayer Brown

Recent Developments in Delaware Officer Exculpation Charter Amendments

Mayer Brown on

Key Takeaways: As noted in our previous Legal Update, the August 2022 amendments to Section 102(b)(7) of the Delaware General Corporation Law (DGCL) permits a Delaware corporation to include an officer exculpation provision...more

BCLP

Recent Delaware cases clarify Caremark oversight duties for directors and executive officers

BCLP on

A claim for breach of the duty of oversight is known as a Caremark claim, after the landmark Delaware Court of Chancery decision in In re Caremark International Inc. Derivative Litigation (1996). Since then, Delaware courts...more

Womble Bond Dickinson

Delaware Extends Exculpation Rights to Senior Officers: Updates and Guidance on Corporate Charter Amendments

Womble Bond Dickinson on

Since 1986, Section 102(b)(7) of the Delaware General Corporation Law (“DGCL”) has allowed corporations to include an exculpation provision in their certificate of incorporation that eliminates or limits the personal...more

Venable LLP

Officer Exculpation - Delaware and Maryland

Venable LLP on

Effective August 1, 2022, Delaware amended its General Corporation Law (the "DGCL") to permit the certificate of incorporation of a Delaware corporation to provide for exculpation of officers from liability to the corporation...more

Allen Matkins

Will Mallory Doom Delaware's Officer Exculpation Statute And Its Corporate Hegemony?

Allen Matkins on

Last summer, Delaware amended Section 102(b)(7) to permit the exculpation of certain officers for direct (but not derivative) stockholder suits for monetary damages for breach of fiduciary duty...more

Mintz Edge

Amendment to Delaware Law Permits Exculpation of Officers in Corporate Charters

Mintz Edge on

Delaware has long permitted corporations to limit or eliminate monetary liability of directors from breach of fiduciary duty of care lawsuits. However, the same protections have not been afforded to a corporation’s officers....more

BakerHostetler

Corporate Officers May Be Exculpated from Personal Liability Under New Amendment to Delaware Law

BakerHostetler on

Key Takeaways ..Newly amended DGCL Section 102(b)(7) allows Delaware corporations to provide officers with exculpatory protections for personal monetary damages resulting from a breach of fiduciary duty in certain...more

Dorsey & Whitney LLP

Proposed Statutory Officer Exculpation in Delaware

Dorsey & Whitney LLP on

As we transition into spring, the minds of many corporate attorneys return to the annual updates proposed to the Delaware General Corporate Law (DGCL). If the changes proposed by the Council of Corporation Law Section of the...more

Hogan Lovells

United Food & Com. Workers Union v. Zuckerberg: Exculpatory clause does not render demand futile

Hogan Lovells on

In United Food & Com. Workers Union v. Zuckerberg, No. 404, 2020 (Del. Sup. Sep. 23, 2021), the Delaware Supreme Court adopted a new, three-part test for determining when a shareholder is required to make a pre-suit demand on...more

Troutman Pepper

The 2020 Amendments to the Delaware General Corporation Law

Troutman Pepper on

Overview Governor Carney recently signed into law certain amendments (the Amendments) to the Delaware General Corporation Law (the DGCL) that (i) clarify the powers of boards of directors in an emergency...more

A&O Shearman

Delaware Supreme Court Reverses Dismissal Of Merger-Related Breach Of Fiduciary Duty Claims Regarding Allegedly Undisclosed...

A&O Shearman on

On June 30, 2020, in an en banc opinion authored by Justice Karen L. Valihura, the Supreme Court of Delaware reversed the Delaware Court of Chancery’s dismissal of a stockholder lawsuit arising out of the merger between...more

Skadden, Arps, Slate, Meagher & Flom LLP

Delaware Corporate Law Amendments Address Emergency Powers, Public Benefit Corporations and Other Matters

On June 23, 2020, the Delaware General Assembly adopted amendments to the Delaware General Corporation Law (DGCL) proposed by the Delaware State Bar Association, including provisions confirming certain powers that a board of...more

BCLP

When Directors and Officers Are Sued: How Exculpation, Indemnification and Advancement of Expenses Works (And Doesn’t Work)

BCLP on

Corporate directors and officers may face potential personal liability for claims made against them in their roles for the companies they serve. Corporations may purchase directors and officers (D&O) liability insurance to...more

BCLP

Am I Covered? What You May Be Missing In Your D&O Liability Insurance

BCLP on

To address the risk of personal liability that directors and officers may face for claims made against them in their corporate roles, companies often purchase director and officer (“D&O”) liability insurance. The role of such...more

Jackson Walker

Key Texas M&A Issues (Presentation)

Jackson Walker on

Agenda - Letters of Intent - Best Efforts - Indemnification - Sandbagging - Non-Reliance - Fiduciary Duties - Letters of Intent: • Buyer may seek letter of intent that is generally not binding on either party...more

Sheppard Mullin Richter & Hampton LLP

Tenth Circuit Upholds Nevada Law By Denying Stockholders Standing to Bring Claims on Behalf of Nevada Corporation

In In re Zagg Inc. Shareholder Derivative Action, No. 15-4001, 2016 U.S. App. LEXIS 11095 (10th Cir. June 20, 2016), the United States Court of Appeals for the Tenth Circuit held that stockholders of a Utah-based, Nevada...more

Allen Matkins

10th Circuit Highlights Difference Between Delaware And Nevada Exculpatory Statutes

Allen Matkins on

Because the power to manage a corporation’s affairs rests with the board of directors, it is normally up to the board to decide whether the corporation will pursue a claim. A shareholder who believes that the corporation...more

Morris James LLP

Court of Chancery Again Explains Claim Against An Investment Banker

Morris James LLP on

In this unusual factual circumstance, the Court denied a motion to dismiss a claim against an investment banker for aiding and abetting a board’s alleged breach of its duty to act with care. Note that the board itself was...more

Skadden, Arps, Slate, Meagher & Flom LLP

"Delaware Supreme Court Reaffirms Important Protections for Corporate Directors"

A trio of opinions from the Delaware Supreme Court, each authored by Chief Justice Leo E. Strine, Jr., has reaffirmed Delaware’s deference to the business judgment of disinterested corporate decision-makers and restored...more

Manatt, Phelps & Phillips, LLP

Fourth Circuit: Business Judgment Rule May Not Protect Bank Officers in FDIC Action

Why it matters - Bank officers may be liable in a lawsuit brought by the Federal Deposit Insurance Corp. (FDIC) while the directors escaped liability, in a new ruling from the Fourth Circuit Court of Appeals interpreting...more

Allen Matkins

Before Rapunzel There Was Rudabeh

Allen Matkins on

In Koehler v. NetSpend Holdings, Inc., 2013 Del. Ch. LEXIS 131 (Del. Ch. May 21, 2013), Vice Chancellor Sam Glasscock III wrote “In fact, NetSpend appears more Rapunzel than Penelope; she must, it seems, let down her hair or...more

Smith Anderson

Exculpatory Provisions Provide Powerful Protection for Independent Directors

Smith Anderson on

The Delaware Supreme Court recently issued an important decision clarifying the standards that govern claims for money damages against independent directors of corporations whose charters contain exculpatory provisions. ...more

Cozen O'Connor

Chen v. Howard-Anderson: A Study in the Standards of Review and of D&O Conduct in the Merger Context

Cozen O'Connor on

Litigation over challenges to corporate mergers has swelled in recent years, exposing directors, officers and their D&O insurers to large amounts of defense costs and potentially great liability. The Delaware Chancery Court...more

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