As readers will recall, last week I published a post about the split verdict a Northern District of Georgia jury entered in the civil lawsuit the FDIC had filed against certain former directors of the failed Buckhead Community Bank. The verdict arose in one of the rare failed bank cases to actually go all the way to trial. In the following guest post, Robert Long Tod Sawicki, Elizabeth Gingold Clark and Lauren Tapson Macon of the Alston & Bird law firm discuss the Buckhead Community Bank lawsuit trial and verdict. Alston & Bird represents the defendants in the case. I would like to thank Robert and his colleagues for their willingness to allow me to publish their article as a guest post. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the Alston & Bird attorneys’ guest post.
Continue Reading Guest Post: Jury Applies Georgia’s Business Judgment Rule
Fourth Circuit Affirms Dismissal of All Claims Against Failed Bank’s Directors, Revives Negligence Claims Against Bank’s Officers
On August 18, 2015, in an interesting opinion that takes a close look at exculpatory bylaw issues and the business judgment rule under North Carolina law, the Fourth Circuit affirmed in part and reversed in part the district court’s dismissal of the failed bank lawsuit the FDIC had filed against former directors and officers of Cooperative Bank of Wilmington, N.C. The appellate court affirmed the dismissal of all of the claims against the director defendants but reversed the lower court’s ruling as to the negligence and breach of fiduciary duty claims against the officer defendants.
Continue Reading Fourth Circuit Affirms Dismissal of All Claims Against Failed Bank’s Directors, Revives Negligence Claims Against Bank’s Officers
A Look at the Modern Business Judgement Rule
Under time-honored standards, and as developed over time by Delaware’s court, the business judgment rule is, as is often stated, a “presumption that in making a business decision, the directors of a company have acted on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the corporation.” However, as discussed in an interesting paper, in more recent times, courts have had to consider these principles in more troubling contexts, such as takeover battles or controlling shareholder transactions. As a result the courts have developed what BYU Law Professor D. Gordon Smith in his August 6, 2015 post on the CLS Blue Sky Blog (here) calls “the Modern Business Judgment Rule.” A longer version of Professor Smith’s paper can be found here.
Continue Reading A Look at the Modern Business Judgement Rule
Dismissal Granted in Cyber Breach-Related Derivative Suit Filed Against Wyndham Officials
Along with the separate derivative lawsuit filed against Target Corporation’s board, the cyber breach-related derivate action filed against Wyndham Worldwide Corporation’s board has been closely watched as representative of a potential new area liability exposure for corporate directors and officers. However, in an October 20, 2014 opinion, District of New Jersey Judge Stanley Chesler,
Failed NC Bank Execs Granted Summary Judgment on All FDIC Claims
On September 11, 2014, in a sharply worded order that will give heart to the FDIC’s many other failed bank litigation targets, Eastern District of North Carolina Judge Terrence Boyle, applying North Carolina law, granted the summary judgment motion of the former directors and officers of the failed Cooperative Bank of Wilmington, N.C., in the
Georgia Supreme Court Affirms, Elucidates Business Judgment Rule – and Its Limitations
A recurring issue in FDIC litigation against the former directors and officers of failed banks has been whether the business judgment rule insulates the defendants from claims of ordinary negligence. This question has been particularly important in Georgia, where there were more bank failures than any in other state and consequently more failed bank litigation.
Guest Post: The Business Judgment Rule Under Attack
In many jurisdictions, corporate officials sued for their actions undertaken in their corporate capacity may be able to defend themselves in reliance on the “business judgment rule.” This rule is designed to prevent courts from second-guessing the decisions of directors and officers. The defense has become particularly important in connection with the extensive litigation the
Are Bank Directors and Officers Entitled to Less Business Judgment Rule Protection Than Other Corporate Directors and Officers?
Are bank directors and officers sufficiently different from directors and officers of ordinary business corporations that the protections of the business judgment rule available to other directors and officers are not available to protect directors and officers of a bank? That is a question that Northern District of Georgia Judge Thomas W. Thrash, Jr. asked
When the Business Judgment Rule Isn’t Available to Protect Directors
A recurring issue in the litigation the FDIC has filed against the directors and officers of failed banks is the question of whether or not officers – as opposed to directors – can rely on the business judgment rule as a defense under applicable state law. A July 8, 2013 decision by Judge Dean Pregerson applying
Former IndyMac Officers Cannot Rely on Business Judgment Rule as Defense in FDIC Failed Bank Lawsuit
On October 5, 2012, in the latest in a series of decisions addressing the question whether or not corporate officers (as differentiated from corporate directors) are entitled under California law to rely on the protections of the business judgment rule, Central District of California Judge Dale Fischer held that former officers of the failed IndyMac