News & Analysis as of

Former Directors

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

by 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

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

by 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

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

by McCarter & English, LLP on

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

Court Of Chancery Explains Advancement Rights Of Seller Representative

by 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

Court Of Chancery Explains Advancement Rights Of Former Director

by 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

Personal Liability for Redundancy Breaches

by 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

SEC Proposes Rules to Broaden Executive Compensation “Clawback” Policies Required by Dodd-Frank

In an effort to increase executive accountability and promote higher quality financial reporting, the Securities and Exchange Commission (the “SEC”) issued proposed Rule 10D-1 for comment on July 1, 2015. The SEC issued the...more

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

Court Of Chancery Explains Apportionment In Advancement Case

by Morris James LLP on

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

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

Summary of SEC's Proposed Rule on Executive Compensation Clawbacks

by Faegre Baker Daniels on

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

SEC Proposes Broadened Rules on Clawback of Incentive-Based Compensation

by White & Case LLP on

Proposed Rules would require increased disclosures on companies’ recovery processes and affect the majority of issuers with listed securities. Background - On July 1, 2015, the Securities and Exchange Commission...more

Chancery Court Upholds Indicted Ex-Director's Advancement Rights

by Morris James LLP on

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

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

by Morris James LLP on

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

Court Of Chancery Limits Conditional Advancement Contracts

by 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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