Director and Officer Liability: Trends From Recent Delaware Cases
Breach of Fiduciary Duty Claims, Activist Shareholders, Records Retention, Material Conflicts, and Merger Challenges
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Corporate Law
- event Date
Thursday, March 4, 2021
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will examine the most significant recent Delaware court decisions impacting director and officer liability. The panel will explain how these decisions may affect future stockholder claims, merger challenges, and demands for books and records. The panel will also address the differences in liability claims brought against directors versus officers.
Mr. Leavengood is a partner in the firm's Corporate Group. His practice focuses primarily on corporate and commercial litigation in the Delaware Court of Chancery, which includes experience in litigating stockholder class and derivative actions, as well as actions for appraisal, indemnification, and inspection of books and records. Mr. Leavengood also has experience in counseling boards of directors and special board committees of Delaware corporations with respect to issues of fiduciary duty and internal corporate governance.
Ms. Levy focuses her practice on corporate and commercial litigation in matters involving Delaware corporations and alternative entities. Her experience includes stockholder class and derivative actions, actions for appraisal, indemnification and advancement actions, and demands to inspect books and records. Ms. Levy also has experience counseling boards of directors and corporate clients on their rights and obligations under Delaware law.
Delaware courts in 2020 delivered several decisions related to the liability of directors and potential breach of fiduciary duty claims. Governance documents may contain provisions that can exculpate directors from liability for breach of the duty of care, but such claims nevertheless can be maintained against officers. Even in cases where claims are questionable against directors, officers who played a role in a transaction may face liability if they perform their duties.
Officer liability is not limited to derivative litigation and may also be alleged in class action merger litigation. Officers must know that when tasked with merger-related projects (such as drafting or reviewing stockholder disclosures) it is imperative to take reasonable steps to inform themselves and board members of material information. Officer liability is increasingly the subject of merger challenges. Delaware companies should be prepared to respond to books and records requests that seek information related to the conduct of not only directors, but also of officers.
Listen as our expert panel discusses the most recent Delaware court decisions related to director and officer liability. The panel will discuss best practices regarding advising boards and officers on avoiding liability and how counsel can address stockholder claims and merger challenges.
- Current Delaware litigation
- Officers in deal litigation
- Stockholder-plaintiff challenges to officer conduct
- Books-and-records demands for officer materials
The panel will review these and other key issues:
- What does current Delaware case law say about director liability, and how can counsel best limit the risk of director liability?
- What liability do officers have, and how is it different from director liability in merger challenges?
- How do courts interpret the gross negligence standard applicable to breach of fiduciary duty claims against officers?
- What requirements do directors and officers have related to record retention in connection with stockholder demands for inspection?
