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Former Directors

Jenner & Block

Fiduciary Duties of Former Directors of Delaware Corporations

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It is well understood that directors of Delaware corporations are subject to the fiduciary duties of care and loyalty. In general, the duty of care requires directors to base their decisions on all material information...more

Katten Muchin Rosenman LLP

SEC Adopts Mandatory Rules for Clawing Back Incentive-Based Compensation: Questions and Answers for Public Companies and Best...

On October 26, the Securities and Exchange Commission (SEC) adopted long-delayed rules which will require companies to implement mandatory "clawback" policies with respect to incentive-based compensation if the company's...more

Allen Matkins

Could A "Red Wave" Wipe Out The SEC's Clawback Rules?

Allen Matkins on

The Securities and Exchange Commission new "clawback" rules were approved on a divided vote.  The two Republican members of the Commission, Hester M. Peirce and Mark T. Uyeda voted against adoption.  Tomorrow's election will...more

Health Care Compliance Association (HCCA)

Executive from government contracting firm pleads guilty to bribery conspiracy

Compliance Today (November 2020) - The U.S. Department of Justice announced another guilty plea in the case involving bribery and kickbacks at the Pension Benefit Guaranty Corporation. According to the Department of...more

Fenwick & West LLP

McDonald’s Clawback Suit Against Former CEO: A Cautionary Tale

Fenwick & West LLP on

McDonald’s Corporation has joined a growing list of companies that have taken action to forfeit unpaid compensation or demand repayment of compensation previously paid to a former CEO, including equity awards or proceeds from...more

Morris James LLP

Post-Closing Earn-Out Claims Dismissed, But Fiduciary Duty Claims Against Former Director Survive

Morris James LLP on

Neurvana Medical, LLC v Balt USA, LLC, C.A. No. 2019-0034-KSJM (Del. Ch. Feb. 27, 2020). Neurvana Medical, LLC (“Neurvana”) sold a medical device to Balt USA, LLC (“Balt USA”), largely for post-closing consideration if the...more

Morris James LLP

Court of Chancery Orders Advancement of Fees for Former Directors and Officers who Sold their Stock in a Private Transaction

Morris James LLP on

Nielsen v. EBTH, Inc., C.A. No. 2019-0164-MTZ (Del. Ch. Sept. 30, 2019). Delaware law permits advancement of fees and expenses for officers or directors who have such rights under certificates of incorporation, bylaws, or...more

Morris James LLP

Advancement Available for Post-Separation Misuse of Confidential Information Obtained “By Reason of the Fact” of Corporate Service

Morris James LLP on

Ephrat v. medCPU, Inc., C.A. No. 2018-0852-MTZ (Del. Ch. Jun. 26, 2019). Former directors and officers may be entitled to advancement for post-separation conduct if that conduct is "by reason of the fact" of the directors'...more

Allen Matkins

Court Holds No "Continuous Director" Status Required Under Nonprofit Law

Allen Matkins on

The California Supreme Court has imposed a continuous ownership requirement for shareholder derivative suits under California Corporations Code Section 800. Grosset v. Wenaas, 42 Cal. 4th 1100 (2008). Thus, a shareholder must...more

Seyfarth Shaw LLP

Delaware Chancery Court Throws Out Claims Over $10 Million Severance Payment to CEO

Seyfarth Shaw LLP on

Seyfarth Synopsis: A Delaware Chancery Court judge last week dismissed a derivative complaint seeking to recover a $10 million severance payment made to a corporation’s former CEO because he found that plaintiff shareholder...more

Zuckerman Spaeder LLP

Can an Employer Back out of a Promise to Provide Advancement by Claiming That the Employee Committed Fraud?

Zuckerman Spaeder LLP on

Numerous decisions from the Delaware courts establish that a company cannot abandon its promise to advance legal fees and expenses when the covered director, officer, or employee properly invokes it....more

McCarter & English, LLP

Delaware Law Updates - Delaware law on advancement of fees incurred by former officers and directors

In a recent Delaware Court of Chancery case - Hyatt v. Al Jazeera America Holdings II, LLC, C.A. No. 11465-VCG - Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery took on a “familiar” issue with a “twist”:...more

Morris James LLP

Court Of Chancery Explains Advancement Rights Of Seller Representative

Morris James LLP on

This is an interesting advancement case as it applies the usual test of whether the former directors have been sued “by reason of the fact” they were directors in the context of suit against former owners’ representative for...more

Morris James LLP

Court Of Chancery Explains Advancement Rights Of Former Director

Morris James LLP on

As is well known, a former director may be entitled to have his fees advanced in suits against him even after he has resigned from the board. ...more

Dechert LLP

Personal Liability for Redundancy Breaches

Dechert LLP on

Collective redundancy consultation has recently become a lot more serious on a personal level for directors and senior managers. Three former directors of collapsed delivery company Citylink are being prosecuted in...more

Stinson - Corporate & Securities Law Blog

Court Examines Disclosure Duties in Consent Solicitaion Removing Directors

In Kerbawy v. McDonnell, the Delaware Court of Chancery affirmed the validity of a solicitation of written consents that removed certain directors and appointed new directors. A key theme of the opinion is that stockholders...more

Morris James LLP

Court Of Chancery Explains Apportionment In Advancement Case

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Not infrequently, a former director may seek to have his attorney fees advanced in two pending matters, only one of which is covered by a corporation’s advancement obligations. An example would be an SEC action coupled with a...more

Orrick, Herrington & Sutcliffe LLP

A Plain English Guide to the SEC's Compensation Clawback Rules

As accounting restatements occur relatively infrequently, and the severity is often modest, the proposed “clawback” rules represent more of a "check the box" compliance activity than a real enforcement threat....more

Faegre Drinker Biddle & Reath LLP

Summary of SEC's Proposed Rule on Executive Compensation Clawbacks

The Dodd-Frank Act required the Securities & Exchange Commission (SEC) to adopt rules that direct national securities exchanges (such as the NYSE and NASDAQ) to require listed companies to implement and disclose their...more

Morris James LLP

Chancery Court Upholds Indicted Ex-Director's Advancement Rights

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Advancement provides corporate officials with immediate interim relief from the personal out-of-pocket financial burden of paying the significant ongoing expenses inevitably involved with defending investigations and legal...more

Morris James LLP

Court Of Chancery Explains The “Personal Claim” Exception To Advancement Rights

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In the area of what claims are subject to the right to have fees advanced to a former officer or director, there is no more often disputed issue than whether the claim asserted arose out of the role as an officer or director...more

Morris James LLP

Court Of Chancery Limits Conditional Advancement Contracts

Morris James LLP on

As in the past, the Court of Chancery again rejects this effort to welch. Notwithstanding a charter and bylaw provision that gave a former director the broadest rights to advancement, the company had him sign an undertaking...more

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