iOS app Android app

Business Judgment Rule

"Business Judgment Rule" Protections Come With Requirements

Brad Reid | Posted 09.01.2016 | Business
Brad Reid

While there is a presumption that directors and officers act with due care on an informed basis in a good faith belief that their actions are in the best interest of the corporation, the presumption is not absolute.

Directors Could Be Personally Liable for Off-Label Drug Marketing Violations

Brad Reid | Posted 11.10.2014 | Business
Brad Reid

A recent decision of the federal Court of Appeals for the Ninth Circuit indicates that corporate directors could face personal liability for off-label...

Review the Bylaws

Brad Reid | Posted 08.04.2014 | Business
Brad Reid

It is best to anticipate and prepare for problems and disputes rather than react after the fact. Particularly in small businesses, the bylaws may not have been consulted or reviewed in many years.

Directors Must Remedy Known Regulatory Violations or Face Personal Liability

Brad Reid | Posted 10.27.2013 | Business
Brad Reid

The business judgment rule insulates corporate directors from personal liability for mistaken decisions made with adequate information and in good faith.

Directors Serving as Officers May Not Have Business Judgment Rule Protection

Brad Reid | Posted 09.10.2013 | Business
Brad Reid

Directors need to be informed concerning not only the law of the state in which they act but also the law of the state of incorporation.

Directors Must Conduct a 'Market Check' When Selling the Corporation

Brad Reid | Posted 07.28.2013 | Business
Brad Reid

The business judgment rule broadly shields directors from liability for mistakes when acting in a reasonable and informed manner. Precisely what constitutes a reasonable and informed process when directors negotiate the sale of the corporation was discussed by the Delaware Court of Chancery in an unpublished recent decision, Koehler v. NetSpend Holdings, Inc.

Directors Must Investigate Shareholders' Concerns

Brad Reid | Posted 07.13.2013 | Business
Brad Reid

Directors have a fiduciary duty to shareholders to act with due care and in good faith. A fiduciary has a high standard of care that requires that informed decisions be made honesty and fairly.

Shareholders Must Go to the Corporation Before Going to the Courthouse

Brad Reid | Posted 02.14.2012 | Business
Brad Reid

While shareholders are the owners of a corporation, in everyday actions the board of directors and officers manage the business. If a shareholder disa...

Non-profit Directors Face Personal Liability

Brad Reid | Posted 12.31.2011 | Business
Brad Reid

A recent decision by the U.S. Court of Appeals for the Third Circuit, In re Lemington Home for the Aged, is a reminder to nonprofit corporation direct...