News & Analysis as of

Business Judgment Rule Directors

A Primer To Covering Your Personal Assets As A Director Or Officer

by GB&A Insurance on

For directors and officers considering a seat in the c-suite, the prospect of having your personal assets exposed can be a scary one. Before accepting that seat, it's important to understand how/when your assets could come...more

Shareholder-Approved Award Limits for Non-employee Directors: Legal Update and Actions to Consider

by K&L Gates LLP on

A recent Delaware court decision validates the trending practice to add specific limits on non-employee director pay in public company “omnibus” incentive compensation plans, to be approved by...more

Strengthening the Georgia Business Judgment Rule

by Alston & Bird on

Yesterday, May 9, 2017, Governor Nathan Deal signed HB 192 into law, amending the Georgia Business Corporation Code and corresponding provisions in the Financial Institutions Code of Georgia. HB 192...more

Another Reminder that Director Limits set forth in Equity Plans Allow Director Compensation to be Reviewed under the more Lenient...

Earlier this month, in In re Investors Bancorp, Inc. Stockholders Litigation, the Delaware Court of Chancery reiterated its view that placing a meaningful limit on director equity awards to be granted under a stockholder...more

Equity Grants to Directors Subject to Business Judgment Review as a Result of Specific Plan Limits

The Delaware Court of Chancery examined equity grants to directors in In Re Investors Bancorp, Inc. Stockholder Litigation. The equity incentive plan, or EIP, at issue included the following limitations on grants...more

Jury Applies Georgia’s Business Judgment Rule

by Alston & Bird on

On October 25, 2016, a jury in the U.S. District Court for the Northern District of Georgia rejected the Federal Deposit Insurance Corporation’s (FDIC) argument that former directors and officers of The Buckhead Community...more

How to Avoid Director Pay Litigation

In the last few years, Delaware courts have issued several rulings in lawsuits involving complaints of excessive compensation to non-employee directors (1). The takeaways from these cases can be summarized as follows...more

Turkey Corporate Newsletter - September 2016

by White & Case LLP on

Considering Becoming A Board Member? Read This First. Good corporate governance requires fully informed board members who are aware of their duties and the potential legal implications of their actions. Under the...more

Chancery Court Denies Motion to Dismiss Fiduciary Duty Claims Where Directors Approved Merger That Extinguished Threatened...

On July 28, 2016, the Delaware Court of Chancery held that stockholders of Riverstone National, Inc. had adequately stated a breach of fiduciary duty claim against the company's directors who approved a merger that...more

Consider Adding Separate Annual Sublimit on Director Equity Awards

by Snell & Wilmer on

In response to the Delaware Chancery Court’s 2012 and 2015 decisions in Seinfeld v. Slager and Calma v. Templeton and Facebook’s 2016 settlement of Espinoza v. Zuckerberg, public companies that are adopting or amending...more

Cybersecurity Risks: Directors and Officers Should Stop, Collaborate and Listen

The risks associated with cyber-attacks and data breaches are growing in Canada and internationally and the costs associated with an organization preventing, detecting, responding to and recovering from such an incident can...more

Inside M&A - October 2015

by McDermott Will & Emery on

Overview of SPACs and Latest Trends - A number of recent successful business combination transactions involving special-purpose acquisition companies (SPACs) led by prominent sponsors have driven a resurgence in the SPAC...more

Insights: The Delaware Edition - October 2015

We are pleased to share with you the inaugural issue of Insights: The Delaware Edition, a periodic publication addressing significant Delaware deal litigation and corporation law developments. In This Issue: - Q&A...more

"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

Fraud Means a “Fairer” Price: In re Dole Finds CEO and COO Personally Liable for Over $148 Million in Damages

by McGuireWoods LLP on

On August 27, 2015 the Delaware Court of Chancery issued a post-trial decision, In re Dole Food Company, Inc. Stockholder Litigation, that held two of Dole’s directors, David Murdock and Michael Carter, personally liable for...more

Locke Lord QuickStudy: Litigation Threat Means Public Companies Should Review Director Compensation Process

by Locke Lord LLP on

Corporate directors are permitted to, and regularly do, set their own compensation. This has not been controversial because boards have typically taken seriously their responsibility to set compensation that is reasonable and...more

A Key Reminder to Directors of Delaware Corporations When Granting Equity Awards under an Equity Incentive Plan

by McCarter & English, LLP on

Corporate directors routinely make decisions regarding their own compensation. If challenged by stockholders, such decisions are generally reviewed by Delaware courts under the onerous "entire fairness" standard, which...more

Back To The Future – Should Stock Incentive Plans Impose Grant Limits on Non-Employee Director Awards?

On April 30, 2015, the Court of Chancery of the State of Delaware rendered an important case decision in a procedural matter dealing with the equity compensation of non-employee members of a company’s board of directors (see...more

Delaware Supreme Court’s In re Cornerstone Therapeutics Decision Allows Independent Directors To Utilize Section 102(b)(7) Defense...

by King & Spalding on

A director’s responsibilities in serving on a corporate board are attended by substantial personal financial risks—not least of which is the specter of shareholder litigation. Exculpatory charter provisions, such as Section...more

Avoiding Personal Liability: A Guide For Directors And Officers

by DLA Piper on

According to the popular media, we are living in an era of corporate crime. Scandals like Enron, HealthSouth and WorldCom stretch so far back they seem like they are not even of this millennium. Among the milestones since...more

Delaware Court of Chancery Applies Business Judgment Rule to Directors Who Approve Merger Supported by Large Shareholders

by Reed Smith on

In its October 24, 2014, decision in In re Crimson Exploration Inc. Stockholder Litigation, C.A. No. 8541, the Delaware Court of Chancery confirmed that the business judgment rule is applicable in evaluating claims for breach...more

Nevada’s Business Judgment Rule: FDIC – 4; Management – 0

by Allen Matkins on

In recent weeks, the U.S. District Court has issued four separate rulings in cases brought by the Federal Deposit Insurance Corporation (FDIC) against former bank managers for breach of fiduciary duty. Here is a brief recap...more

Delaware Court Denies Dismissal for Disinterested Directors When Entire Fairness Applies

The Delaware Court of Chancery recently addressed the pleading standard for claims against disinterested directors arising out of transactions involving a controlling stockholder, where the transaction has been alleged to be...more

Court of Appeal Clarifies Directors’ Fiduciary Duties and the Business Judgment Rule for Executive Compensation Matters

by Dentons on

The Court of Appeal for Ontario recently affirmed the nature of directors’ and officers’ fiduciary duties and clarified the application of the business judgment rule in the context of a dispute regarding executive...more

Georgia Supreme Court Applies the Business Judgment Rule to Bank Officers and Directors; Decision Has Implications for Corporate...

In a landmark ruling for officers and directors of Georgia’s financial institutions, the Supreme Court of Georgia held in FDIC v. Loudermilk, S14Q0454 (Ga. July 11, 2014), that officers and directors of banks are protected by...more

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