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Exculpatory Clauses

Wilson Sonsini Goodrich & Rosati

Officer Exculpation and the Silicon Valley 150: Year Two

Last year, we reviewed proxy statements filed by companies in the Silicon Valley 150 (SV150) to see whether they included an officer exculpation proposal in their proxy statements for stockholder meetings held from August 1,...more

Mayer Brown

Developments and Trends in Delaware Officer Exculpation Charter Amendments

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In August 2022, the Delaware General Assembly amended the Delaware General Corporation Law (“DGCL”) to allow corporations to adopt charter provisions exculpating certain officers from personal liability for monetary damages...more

Seward & Kissel LLP

2023 Seed Transactions Deal Points Study

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Seed investments in hedge funds, private equity funds, private credit funds, and other investment vehicles continued to generate significant deal volume in 2023, according to the tenth annual Seward & Kissel Seed Transactions...more

Hogan Lovells

Delaware Supreme Court holds separate class vote not required for officer exculpation amendment

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In re Fox Corporation/Snap Inc. Section 242 Litigation, the Delaware Supreme Court ruled that corporations do not need to seek votes from each separate stockholder class to approve charter amendments exculpating corporate...more

Mayer Brown

Recent Developments in Delaware Officer Exculpation Charter Amendments

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Key Takeaways: As noted in our previous Legal Update, the August 2022 amendments to Section 102(b)(7) of the Delaware General Corporation Law (DGCL) permits a Delaware corporation to include an officer exculpation provision...more

Ballard Spahr LLP

DE Supreme Court: No Class Vote Required Where Corporations With Multi-Class Capital Structure Adopted Exculpatory Charter...

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Delaware’s Supreme Court unanimously rejected challenges by stockholders of two corporations who argued the respective companies invalidly adopted exculpatory charter provisions without giving each class of stock a separate...more

White and Williams LLP

Beware: A Security Company’s Contract May Eliminate Your Causes of Action

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xIn Jewels by Iroff, Inc. v. Securitas Tech. Corp., No. 1:23-CV-556-TWT, 2023 U.S. Dist. LEXIS 172391, a Georgia federal court addressed a suit against a security/alarm company arising from a break-in at a jewelry store where...more

Freiberger Haber LLP

Can You Limit Liability for Your Own Negligence in a Contract

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Folks sign contracts of all types that purport to contain limitations of liability; but are they enforceable.  In many cases, the answer is “yes”.  “In the absence of a contravening public policy, exculpatory provisions...more

Jones Day

Texas District Court: Equitable Mootness Doctrine Does Not Preclude Appellate Review of Chapter 11 Plan Exculpation Clause

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Exculpation clauses limiting the liability of certain entities for actions taken in connection with a bankruptcy case are a common feature of chapter 11 plans. However, courts disagree over the permitted scope of such...more

BCLP

Recent Delaware cases clarify Caremark oversight duties for directors and executive officers

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A claim for breach of the duty of oversight is known as a Caremark claim, after the landmark Delaware Court of Chancery decision in In re Caremark International Inc. Derivative Litigation (1996). Since then, Delaware courts...more

Goodwin

SEC Brings Suit Against Owner of BitTorrent, Inc., and Settles Claims With Celebrity Endorsers of Certain Crypto Tokens

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On March 22, 2023, the US Securities and Exchange Commission (SEC) filed a complaint in US District Court for the Southern District of New York against Justin Sun, the owner of BitTorrent, Inc., a file-sharing platform; three...more

Womble Bond Dickinson

Delaware Extends Exculpation Rights to Senior Officers: Updates and Guidance on Corporate Charter Amendments

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Since 1986, Section 102(b)(7) of the Delaware General Corporation Law (“DGCL”) has allowed corporations to include an exculpation provision in their certificate of incorporation that eliminates or limits the personal...more

Cadwalader, Wickersham & Taft LLP

Delaware Supreme Court Enforces Partnership Agreement’s Unambiguous Exculpation Provision Waiving Fiduciary Duties and Presuming...

On December 19, 2022, Chief Justice Seitz issued an opinion for a unanimous Delaware Supreme Court, sitting en banc, reversing and remanding the Delaware Court of Chancery’s decision in Bandera Master Fund LP v. Boardwalk...more

Venable LLP

Officer Exculpation - Delaware and Maryland

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Effective August 1, 2022, Delaware amended its General Corporation Law (the "DGCL") to permit the certificate of incorporation of a Delaware corporation to provide for exculpation of officers from liability to the corporation...more

Allen Matkins

Will Mallory Doom Delaware's Officer Exculpation Statute And Its Corporate Hegemony?

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Last summer, Delaware amended Section 102(b)(7) to permit the exculpation of certain officers for direct (but not derivative) stockholder suits for monetary damages for breach of fiduciary duty...more

Mintz Edge

Amendment to Delaware Law Permits Exculpation of Officers in Corporate Charters

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Delaware has long permitted corporations to limit or eliminate monetary liability of directors from breach of fiduciary duty of care lawsuits. However, the same protections have not been afforded to a corporation’s officers....more

Hicks Johnson

How Do JOA Exculpatory Clauses Work Under Texas Law? Part Two: The Recent Decision in Bachtell Defines “Activities”

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As discussed in part one of this series, a Joint Operating Agreement’s (JOA) exculpatory clause relieves the designated “operator” from liability for certain conduct or activities. But, as explained by the Texas Supreme Court...more

BakerHostetler

Corporate Officers May Be Exculpated from Personal Liability Under New Amendment to Delaware Law

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Key Takeaways ..Newly amended DGCL Section 102(b)(7) allows Delaware corporations to provide officers with exculpatory protections for personal monetary damages resulting from a breach of fiduciary duty in certain...more

Gray Reed

Exculpatory Clause Does Not Save Operator From Liability

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Non-operators under the 1989 Model Form JOA have been hoping to drive a stake through the dark heart of Reeder v. Wood County Energy, LLC. Bachtell Enterprises, LLC v. Ankor E&P Holdings Corp might be a start. The question...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

Dorsey & Whitney LLP

Proposed Statutory Officer Exculpation in Delaware

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As we transition into spring, the minds of many corporate attorneys return to the annual updates proposed to the Delaware General Corporate Law (DGCL). If the changes proposed by the Council of Corporation Law Section of the...more

Patterson Belknap Webb & Tyler LLP

Fiduciary Duties Waivable by Contract, Precluding Claims

The U.S. Bankruptcy Court in Manhattan recently reminded us why Delaware choice-of-law provisions are so popular in limited partnership and other agreements.  In an adversary proceeding, Judge David S. Jones held that...more

Winstead PC

[Webinar] Financial Services - Litigating Self-Interested Transactions By Trustees - March 1st, 10:00 am - 11:00 am CT

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This presentation will address the various issues that arise when a trustee enters into a self-interested transaction with the trust. Among other issues, it will address the duty of loyalty, the presumption of unfairness,...more

Vinson & Elkins LLP

District Court in Virginia Continues Questioning of Third-Party Releases – At Least in the Absence of Detailed Findings of...

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Judge Colleen McMahon recently opined in Purdue1 that “the lower courts desperately need a clear answer” as to the validity of third-party releases. On January 13, 2022, the United States District Court for the Eastern...more

Lowenstein Sandler LLP

Exculpation Ruling Shows Danger Of Overbroad Clauses

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It is common that accountants seek to limit their liability to a client in the event of malpractice. Typically, in the retention agreement, the liability is limited to the amount of fees paid by the client to the accounting...more

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