A Chinese company’s directors can still be held personally liable for acting in bad faith and failing to exercise oversight of the corporation even after they have resigned from the board, the Delaware Court of Chancery has ruled. The court issued the decision when it denied the company’s directors’ motion to dismiss a lawsuit filed by a shareholder alleging they violated their Caremark duties.
"As Chancellor [Leo E.] Strine [Jr.] recently noted, it is troubling that independent directors would abandon a troubled company to the sole control of those who have harmed the company," said Vice Chancellor Sam Glasscock III in Rich v. Chong an April 25 opinion. "I do not prejudge the independent directors before evidence has been presented but neither are those directors automatically exonerated because of their resignations."
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
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]
