Directors who are mere “stooges” for a controlling shareholder who loots a company may face personal liability for their lassitude, even if they don’t benefit from the shareholder’s conduct, a Delaware judge ruled Dec. 21.
Vice Chancellor Leo E. Strine Jr. held in ATR-Kim Eng Financial Corp. v. Carlos Araneta and PMHI Holdings Corp. that two directors of Delaware-based PMHI violated their fiduciary duties by remaining passive while the company’s 90 percent shareholder transferred its assets to his family for no consideration.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]