Can You Resign from the Board of a Troubled Company?
The following post comes to us from David A. Katz, a partner at Wachtell, Lipton, Rosen & Katz, and Laura A. McIntosh, a consulting attorney for the firm. The views expressed are the authors’ and do not necessarily represent the views of the partners of Wachtell, Lipton, Rosen & Katz or the firm as a whole. This article is also being published today in the New York Law Journal.
Two recent Delaware cases involving independent directors of corporations with foreign operations provide a powerful reminder that resigning from the board of directors of a troubled company may not be a simple matter. In both cases, Delaware chancery court judges denied the director defendants’ motions to dismiss; if the allegations—primarily, that the directors of each company breached their duty of oversight—are proven at trial, the directors potentially could face personal liability. While nothing about these recent cases indicates a radical…
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