Directors

News & Analysis as of

9th Circuit Upholds Issue Preclusion In Subsequent Derivative Suit

Derivative suits rarely arrive alone. When something goes awry, directors and officers can be expected to see multiple suits based on demand futility as well as wrongful demand refusal. Often, suits will be filed at...more

Directors Need to Meet High Standard to Avoid Liability

The Tax Court of Canada again confirmed that directors of corporations will have a high burden to meet to establish a due diligence defence and avoid liability for unremitted source deductions....more

UK Financial Institutions: Proposals for New Senior Managers and Certification Regimes

With a mandate from Parliament, the UK regulators are working on a new regime governing individuals in banks. The UK Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) published a joint...more

Top 10 Topics for Directors in 2015

In this issue: - Strategic Planning Challenges - Cybersecurity - Assess the Impact of Advances in Technology and Big Data - Shareholder Activism - The Return of M&A - Risk...more

In re Novell, Inc. S’holder Litig., C.A. No. 6032 (Del. Ch. Nov. 25, 2014) (Noble, V.C.)

In this memorandum opinion, the Court of Chancery granted summary judgment in favor of defendants on claims alleging that directors acted in bad faith by favoring a bidder in a sale process for reasons other than the pursuit...more

Blog: Chief Justice Strine: In Praise Of B-Corps

In an interesting article In the Harvard Business Law Review, Chief Justice Strine of the Delaware Supreme Court makes clear his view that the concept promoted by some academics and other commentators that corporate directors...more

Lee v. Pincus et al., C.A. No. 8458-CB (Del. Ch. Nov. 14, 2014) (Bouchard, C.)

In this memorandum opinion, the Court of Chancery partially granted defendants’ motion to dismiss, holding that (i) plaintiff had stated a claim for breach of fiduciary duty against the Director Defendants because it was...more

Are Your Company’s Directors and Officers Suitably Insured for Negligence and Civil Fines and Penalties?

Corporate directors and officers have a long list of things that can keep them up at night. Personal liability for civil fines and penalties arising out of negligence should not be one of them. Companies often must or will...more

Information Letter: Management Liability: Potential Risk Zones (Russia)

The recent court practice shows that lawsuits seeking compensation of damages caused to company by its management are being filed with increasing frequency. It is largely due to courts' departure from formalistic approach to...more

UK Court: Directors Insured Under D&O Policies Cannot Avail Themselves of the Financial Ombudsman Service

The question of whether directors insured under D&O policies are entitled to complain to the Financial Ombudsman Service (“FOS”) in respect of an insurer’s handling of a claim has been a frequent discussion point for those...more

Thanksgiving-Eve Delaware Chancery Court Decision Refuses to Dismiss Fraud-Based Claims Against Private Equity Investors and...

On Thanksgiving Eve the Delaware Chancery Court issued a detailed opinion sure to be of significance to all parties involved in M&A transactions, particularly in the private equity space. In Great Hill Equity Partners IV, LP...more

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

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

Do I Need to Update My D&O Questionnaire for 2015?

One of the most frequent questions we get this time of year is issuers asking whether there are any needed updates to director and officer questionnaires. Necessary modifications are usually driven by changes to stock...more

Boards Should Put Time and Resources into Cybersecurity Issues – It Is Good for Business and Works as a Defense Strategy

We have previously blogged about Commissioner Aguilar’s recommendations at a NYSE conference, “Cyber Risks and the Boardroom” on what boards of directors should do to ensure that their companies are appropriately considering...more

I am a Director of a BVI Company. Now What?

Given the share volume of British Virgin Islands Business Companies (BCs) in existence, there is at any given time in some part of the world a transaction involving a BC. Pursuant to the British Virgin Islands Business...more

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

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

Federal Financial Institutions Examination Council Releases Cybersecurity Assessment Results: Boards of Directors and Senior...

The Federal Financial Institutions Examination Council (FFIEC) released general observations yesterday from a cybersecurity assessment of over 500 community financial institutions. The cybersecurity assessment evaluated the...more

Delaware Court Dismisses Action Against Seller's Directors and Financial Advisor, And Finds That Large Stockholder's "Side Deals"...

On October 24, 2014, the Delaware Court of Chancery issued a decision, In Re: Crimson Exploration Inc. Stockholder Litigation, addressing when: (i) a stockholder with less than majority voting power may be deemed a...more

Court Dismisses Shareholder Derivative Action Targeting Directors and Officers for Data Breaches

Earlier this week a federal district court in New Jersey dismissed with prejudice a shareholder derivative suit, Palkon v. Holmes, No. 14-CV-01234 (SRC) (D.N.J.), that tried to blame the directors and officers at hospitality...more

Court Dismisses Shareholder Derivative Action Targeting Directors and Officers for Data Breaches

A federal district court in New Jersey has dismissed with prejudice a shareholder derivative suit, Palkon v. Holmes, No. 14-CV-01234 (SRC) (D.N.J.), that tried to blame the directors and officers at hospitality company...more

Can An Employment Agreement Be A Wee Bit Too Integrated?

The Bylaws of many public companies provide for mandatory indemnification of directors and officers (and sometimes other agents as well). Often, Bylaws describe these indemnity obligations as contract rights. For example...more

Is It Still Privileged? An Insurer’s Disclosure Of Information To Its Reinsurers And Brokers Waives Privilege … Sometimes.

A federal district court recently held that an insurer waived any claim of attorney-client or work product privilege when it disclosed otherwise potentially privileged information to its reinsurers and to its broker. In doing...more

Forum Selection Clauses Were Here Before They Were In Bylaws

Recent rulings by judges in Delaware and other states have given impetus to the adoption of exclusive forum bylaws. To the casual observer, the idea might seem entirely novel. But as Koheleth (the Gatherer) wrote “What has...more

Another Bankruptcy Proofing Strategy Bites the Dust, or Does It?

In an effort to minimize the risk of loss in connection with a loan default, lenders often employ creative means to make it difficult, if not impossible, for a borrower to file bankruptcy....more

Bank Directors, Officers Win Dismissal of FDIC Suit

Almost all cases brought by the FDIC in the last few years against former directors and officers of failed banks have been resolved by negotiated settlements. However, in a recent decision, a federal court judge in North...more

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