The Boeing board “publicly lied” about monitoring airplane safety following two deadly 737 Max crashes, according to court records. Directors also allegedly failed to assess airplane safety and fell short in demanding or expecting safety reports from management. Delaware Chancery Court Judge Morgan Zurn used these and other determinations to allow oversight claims against Boeing…
Tag: delaware
Expanded Director Liability for Email (Delaware) and Greenwashing (Australia)
Arnold and Porter writes: A recent Delaware court decision, In re WeWork Litigation, put a spotlight on the risk of corporate employees and directors destroying privilege by communicating through email….In WeWork, the Delaware Court of Chancery found that the use of Sprint email accounts by Sprint employees doing WeWork-related work for SoftBank caused the communications between SoftBank…
Recent Delaware Court of Chancery Decision Sustains Another Caremark Claim at the Pleading Stage
A board of directors has one job: managing risk. Everything they do, selecting, overseeing, compensating, and replacing top management, setting overall strategy, balancing competing interests, is all in service to sustainable growth of the business. Terms like “mission-critical” are just a reflection of that principle. After decades of routinely dismissing such claims, Vice Chancellor Laster’s…
Citing Thin Board Record: Delaware Court of Chancery Again Sustains Oversight Claim
A rare case of finding a board vulnerable to a liability claim: The Delaware Court of Chancery has sustained another Caremark claim, pointing to the absence of documents produced in response to a stockholder’s inspection demand as evidence that the directors “face a substantial likelihood of liability” for “failing to act in good faith to…
Toward Fair and Sustainable Capitalism: A Comprehensive Proposal to Help American Workers, Restore Fair Gainsharing Between Employees and Shareholders, and Increase American Competitiveness by Reorienting Our Corporate Governance System Toward Sustainable Long-Term Growth and Encouraging Investments in America’s Future by Leo E. Strine Jr.
One of the most thoughtful and knowledgable observers of American corporate governance, Delaware Chief Justice Leo Strine, Jr., believes that companies and our economy will only be robust and vibrant if investors and boards make sure to align the incentives of top executives with ESG goals. He proposes better disclosure and giving employees more power…
Delaware judge says Tesla board must face trial over Musk’s mega-pay package – Reuters
This is a very unusual ruling because judges usually defer to boards’ compensation decisions as well within their discretion under the broad protection of the business judgment rule. But this was a $2.6 BILLION pay package. And, significantly, the compensation committee had conflicts. A Delaware judge ruled on Friday that Tesla Inc’s (TSLA.O) board of…
Goldman Settlement of Investor’s Board-Pay Claims Rejected – Bloomberg
A bid by Goldman Sachs Group Inc. to settle a lawsuit over how much it pays directors was rejected by a judge who said that simply making changes in corporate governance didn’t provide enough benefit to the firm. The ruling comes as part of a chancery court crackdown on so-called “disclosure settlements,’’ in which companies resolve investor…
A ‘Delaware Trap’ for Companies – WSJ
A new study by Robert Anderson IV finds that choice of law firm plays a significant role in the decision to incorporate in Delaware. Dr. Anderson examined regulatory filings related to raising private capital, and concluded that it is all about the company’s choice of law firm near the time of founding.He found that some larger,…
Dole CEO liable for $148 million over unfair buyout: Delaware judge | Reuters
The billionaire chief executive of Dole Food Co and his top lieutenant must pay $148.2 million of damages to shareholders they shortchanged when the produce company went private in 2013, a Delaware judge ruled on Thursday….Shareholders accused Murdock and Carter of driving down Dole’s share price by downplaying the Westlake Village, California-based company’s ability to…
Delaware has Won the Corporate Race to the Bottom: Time for an Overhaul
Why does this matter to the average U.S. investor? Because jurisdiction and terms of the litigation for the business-related lawsuits are often decided by the place of incorporation or the companies own by-laws. Companies like Wal-Mart, Chevron, General Motors, Ford, Dole, all opt to incorporate in Delaware to minimize the pesky lawsuits that demand investors…
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