Director Liability

BLACK ET AL. 58 STAN. L. REV. 1055 3/9/2006 12:21:03 AM OUTSIDE DIRECTOR LIABILITY Bernard Black,* Brian Cheffins,** and Michael Klausner*** This Article flow outs the degree to which international directors of public companies are exposed to due liability jeopardythe risk of paying legal expenses or damages pursuant to a judgment or settlement agreement that are non risey paid by the beau monde or another(prenominal) source, or covered by directors and officers (D&O) liability insurance. Recent settlements in securities class actions involving WorldCom and Enron, in which lead plaintiffs succeeded in extracting out-of-pocket payments from out of doors directors, have led to predictions that such payments will become common. We see the out-of-pocket liability risk facing international directors empirically, legally, and conceptually and show that this risk is very low, far lower than many an(prenominal) a(prenominal) commentators and board members believe, not withstanding the WorldCom and Enron settlements. Our extensive search for instances in which orthogonal directors of public companies have made out-of-pocket payments turned up thirteen cases in the last twenty-five years. Most fasten on fact patterns that should not recur today for a caller-up with a state-of-the-art D&O insurance policy.

We crack a detailed assessment of the liability risk foreign directors face in trials under corporate and securities law, including settlement dynamics. We * Hayden W. flub Regents Chair for Faculty Excellence and prof of Law, University of Texas Law check; prof of Fina nce, McCombs School of Business, University ! of Texas, Austin. ** S.J. Berwin Professor of Corporate Law, Cambridge University, United Kingdom. *** Nancy and Charles Munger Professor of Business and Professor of Law, Stanford Law School. Appendix A lists the firms allow in the survey we conducted in connection with this Article. Many face pack at those firms were helpful to a degree that went well beyond answering our survey questions, and we...If you want to get a abounding essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper