Independent Boards

News & Analysis as of

Chancellor Bouchard Rules There Can Be No Ratification Without Works

In reading Chancellor Andre G. Bouchard’s ruling yesterday in Espinoza v. Zuckerberg, 2015 Del. Ch. LEXIS 273 (Del. Ch. 2015), I was reminded of the theological debate among Christians concerning justification by faith.  The...more

Business Judgment Standard for Disinterested-Stockholder Approval

The Delaware Supreme Court in Corwin v. KKR Financial Holdings LLC, No. 629, 2014 (Del., October 2, 2015), issued an important opinion authored by Chief Justice Leo E. Strine Jr. resolving uncertainty about the effect fully...more

Delaware Supreme Court Addresses Novel Controlling-Stockholder Claim and Clarifies Effect of a Fully Informed, Uncoerced...

The Delaware Supreme Court recently issued an opinion, captioned Corwin v. KKR Financial Holdings LLC, that sheds further light on when a stockholder owning less than 50% of the voting power of a company may be deemed a...more

Corporate and Financial Weekly Digest - Volume X, Issue 38

SEC/CORPORATE - ISS Publishes Results of 2015–2016 Annual Global Policy Survey - On September 28, Institutional Shareholder Services (ISS), a leading proxy advisory firm, published the results of its 2015–2016...more

Proxy Access In The 2015 Season

Rhonda Brauer is a senior managing director of corporate governance at Georgeson Inc. where she helps companies enhance their shareholder communications and analyze their governance practices. She recently joined Latham &...more

Cooperation, the SEC and FOIA

A critical part of cooperating with an SEC or DOJ investigation for FCPA or other possible violations is the production of documents. In order for the company to assess what happened it must conduct an internal investigation...more

Is Your Nonprofit Hospital’s Property Tax Exemption Safe?

Nonprofit hospital leaders are sitting up and taking notice of a New Jersey Tax Court decision, published June 25, that could have a major impact on health care facilities nationwide (AHS Hospital Corp., d/b/a Morristown...more

'Cornerstone' Decision Reinforces Del. Corporate Law Bedrock Principles

Delaware law has long provided that the decisions of disinterested and independent directors who receive no special benefit from a transaction ought not be the basis of personal liability in monetary damages. To subject...more

Value of Independent Directors for the Family Corporation

In the wake of the financial scandals of the early 2000s, a push was made to increase the number of independent directors on public company boards. Most public companies are required to have a majority of independent...more

Delaware Supreme Court Holds That a Stockholder Plaintiff Must Plead a Non-Exculpated Claim to Avoid Section 102(b)(7)-Based...

In the consolidated appeal In re Cornerstone Therapeutics Inc., Stockholder Litigation and In re Zhongpin Stockholders Litigation, Nos. 564, 2014 and 706, 2014, 2015 Del. LEXIS 231 (Del. May 14, 2015), the Delaware Supreme...more

Supreme Court Clarifies When Independent Directors May Be Dismissed From Case

This important Supreme Court decision clarifies when independent, disinterested directors may be dismissed from litigation, even when an interested transaction is under attack. When the complaint only alleges a breach of the...more

Delaware Supreme Court Clarifies Pleading Standard For Claims Against Independent Directors

Yesterday, in In re Cornerstone Therapeutics, Inc. Stockholder Litigation, the Supreme Court of Delaware held that plaintiffs seeking monetary damages against disinterested, independent directors must plead facts sufficient...more

Delaware Supreme Court Confirms Exculpatory Clauses Have Teeth, and Can Be Used By Director Defendants At The Pleading Stage

In a decision with important implications for directors of public companies, the Delaware Supreme Court overturned two Chancery Court opinions and ruled that independent directors facing breach of duty of care claims arising...more

Delaware Supremes Give Independent Directors a Way Out

In an opinion Thursday, the Delaware Supreme Court held that independent directors should be dismissed from shareholder derivative litigation – even over transactions presumptively subject to “entire fairness” review – unless...more

M&A Update: Delaware Supreme Court Issues Important Ruling Protecting Independent Directors

On May 14, 2015, the Delaware Supreme Court ruled that claims against independent directors must be dismissed when a company charter provision shields directors from monetary liability for breach of the duty of care and the...more

Delaware Supreme Court Clarifies Application of Exculpatory Charter Provisions to Motions to Dismiss Independent Directors

On May 14, 2015, the Delaware Supreme Court issued its decision in In re Cornerstone Therapeutics Inc., S'holder Litig., clarifying that damages claims against independent directors can be dismissed where: (1) an applicable...more

Delaware Independent Director Liability in Control Buyout Cases

The Delaware Supreme Court will address the standard for pleading that an independent director has breached fiduciary duties in connection with a controlling shareholder buyout. The issue was certified for interlocutory...more

"Fee-Shifting, Financial Advisor Liability Among Likely Delaware Law Issues for 2015"

The Delaware courts weighed in on familiar issues of importance last year, including multiforum deal litigation and the emphasis on an independent board process, while also delving into relatively new territory such as...more

Shareholder’s Challenge to Smith & Wesson SLC’s Independence Misfires in the First Circuit

On February 4, 2015, the First Circuit affirmed the summary dismissal of a shareholder derivative suit, which brought Nevada state claims for breach of fiduciary duty, waste of corporate assets, unjust enrichment, and...more

Appointment Of Independent Directors On The Eve Of Bankruptcy: Why The Growing Trend?

In recent years, companies in financial distress have found “independent” directors to be useful to achieve protections for their board members. An independent director is a director – usually with no prior affiliation to the...more

Corporate and Financial Weekly Digest - Volume X, Issue 1

In this issue: - SEC Proposes Rule Amendments to Implement JOBS Act Registration Thresholds - ISS Releases FAQs on Equity Plan Scorecard and Independent Chair Policy - FINRA Issues Annual Regulatory and...more

ISS Issues FAQs on Independent Chair Policy and Equity Plan Scorecard

ISS previously issued its 2015 policy updates. ISS has now issued FAQs on the independent chair policy and the Equity Plan Scorecard....more

Director Tenure: A Solution in Search of a Problem

Director tenure continues to gain attention in corporate governance as term limits become a cause célèbre. Proponents argue directors should no longer qualify as independent after 10 years of service, even though no law, rule...more

ISS and Glass Lewis Update Their Proxy Voting Guidelines

Institutional Shareholder Services (ISS) and Glass, Lewis & Co. (Glass Lewis), two of the leading providers of corporate governance research and proxy voting services, have published their updated proxy voting guidelines for...more

ISS Releases 2015 Proxy Voting Guidelines

ISS (Institutional Shareholder Services) has released its annual 2015 Proxy Voting Guidelines Updates. These guidelines apply to annual meetings to be held on or after February 1, 2015. Many of our clients have investors who...more

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