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Business Judgment Rule Personal Liability

Holland & Knight LLP

Delaware Supreme Court: Permissive Business Judgment Rule Applies to Corporate Conversions

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everal 2024 decisions by the Delaware Court of Chancery led some prominent corporate leaders to express frustration over perceived increased liability standards for corporate officers and directors, even publicly advising new...more

Farrell Fritz, P.C.

Principles of Fiduciary Deference: The Business Judgment Rule and Exculpatory Clauses

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A number of lawsuits have percolated through New York’s courts over the past five years between Adam Max, son of world-renowned visual artist Peter Max, and Adam’s sister, Libra, over control and management of the family...more

Barnea Jaffa Lande & Co.

New Israeli Supreme Court Ruling Expected to Reduce Legal Protection Granted to Managers and Board Members in Israel

After a lawsuit filed by liquidators of a company that collapsed against the company’s former officers, directors, and independent auditors was dismissed in limine, a new Israeli Supreme Court ruling overturned that decision...more

BCLP

Delaware Chancery Court Decision Highlights Risks of Liability for Directors in SPAC Deals

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A recent Delaware Chancery Court decision highlights the liability risks faced by directors and sponsors of special purpose acquisition companies (“SPACs”) and the importance of robust disclosure in protecting against those...more

Orrick, Herrington & Sutcliffe LLP

Financing a Distressed Private Company – De-Risking Inside Rounds

During economic downturns, private technology companies often seek emergency funding from existing VC and growth equity investors. These financings, sometimes called “inside rounds,” create conflicts of interest for boards...more

Allen Matkins

Nevada Supreme Court: Gross Negligence Is Insufficient For Director Breach of Fiduciary Claims

Allen Matkins on

NRS 78.138(7)(b) provides that, with certain specific statutory exceptions, a director or officer of Nevada corporation is not individually liable to the corporation or its stockholders or creditors for any damages as a...more

Ward and Smith, P.A.

The Business Judgment Rule: How Corporate Directors Can Sleep Better At Night

Ward and Smith, P.A. on

What is the Business Judgment Rule? The North Carolina Business Corporation Act (the "Act") imposes certain requirements on corporate directors to ensure that they act in the best interest of the corporation when making...more

Foley & Lardner LLP

Directors See More Deference In Wis. Courts Than In Del.

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Wisconsin courts continue to distinguish Wisconsin law from that of other jurisdictions, most notably Delaware. In late 2018, the dismissal of shareholder lawsuits against National Research Corp., or NRC, and its directors in...more

Hogan Lovells

Directors and officers in M&A litigation

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We’ve asked lawyers from our offices in Spain, France, Germany, the Netherlands, and the U.S. to talk about when directors and officers get caught up in M&A litigation....more

Poyner Spruill LLP

Recent Decision Highlights Potential Personal Liability of Hospital Directors Based on Breach of Fiduciary Duty

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In a recent case, a federal bankruptcy court in Michigan reviewed important questions involving breach of fiduciary duty and the application of the business judgment rule to both management and volunteer board members of a...more

Poyner Spruill LLP

Corridors Fall 2018 - News for North Carolina Hospitals

Poyner Spruill LLP on

Recent Decision Highlights Potential Personal Liability of Hospital Directors Based on Breach of Fiduciary Duty - In a recent case, a federal bankruptcy court in Michigan reviewed important questions involving breach of...more

Seyfarth Shaw LLP

Fiduciary Duty With Respect To Trade Secret Asset Management

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Trade Secret’s New Found Prominence: As we both have written previously, the changing nature of technology, product development and sales, and the patent enforcement landscape, have given trade secrets a new-found...more

Womble Bond Dickinson

Liability for Directors of Nonprofit Corporations

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Lawyers are often asked to serve on Boards of nonprofit corporations and if they do so, they will often be asked by other directors about the potential individual liability of a director for actions of the nonprofit, for...more

Jackson Walker

Choice of Entity and Key Contents of Organization Documents

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Five Business Entity Forms: • Corporation • General Partnership • Limited Partnership • Limited Liability Partnership (“LLP”) • Limited Liability Company (“LLC”) ...more

Allen Matkins

Does The Business Judgment Rule Protect Directors Who Violate Governing Documents?

Allen Matkins on

Under the business judgment rule, a director will not be liable for a mistake in business judgment provided that certain conditions are met. In the case of a California nonprofit mutual benefit corporation, a director who...more

Mintz - Bankruptcy & Restructuring Viewpoints

Directors And Officers’ Ultimate Escape From Personal Liability

In the Ultimate Escapes bankruptcy case, the U.S. District Court for the District of Delaware recently held that the “business judgment rule” may protect fiduciaries who negotiate and enter into unconventional financing...more

Skadden, Arps, Slate, Meagher & Flom LLP

"Delaware Supreme Court Clarifies Earlier Rulings, Chancery Court Stakes Out New Positions"

Delaware courts tackled a number of issues of importance in 2015. The Delaware Supreme Court clarified prior inconsistent case law by reiterating that deference must be given to decisions made by disinterested directors. It...more

McGuireWoods LLP

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

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

Poyner Spruill LLP

Bank Boards and Corporate Officers Review your Policies and Procedures: Business Judgment Rule Protections May Be Loosening

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A recent decision from the Fourth Circuit, Federal Deposit Insurance Corporation v. Rippy, No. 14-2078 (4th Cir. Aug. 18, 2015), may signal a weakening of the business judgment rule’s long-standing protections for corporate...more

King & Spalding

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

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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

Baker Donelson

Business Judgment Rule in Georgia: Not a "Get Out of Jail Free Card" for Officers and Directors

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The Georgia Supreme Court has adopted the Business Judgment Rule with a very important nuance that requires officers and directors to not only be prepared when making their decisions but to document their preparations in...more

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