Directors Designated by Venture Capitalists and Other Preferred Stockholders Need To Be Mindful of Inherent Conflicts: In re Trados Inc. Shareholder Litigation
The following post is based on a memo released by Pepper Hamilton LLP on September 4, 2013.
A recent post-trial decision by Vice Chancellor J. Travis Laster of the Delaware Court of Chancery puts directors serving as designees of preferred investors on notice that they must attempt to maximize value for common shareholders, or risk being found liable for breach of fiduciary duty. The opinion, In re Trados Inc. Shareholder Litigation, C.A. No. 1512-VCL (Del. Ch. Aug. 16, 2013), is available at http://courts.delaware.gov/opinions/download.aspx?ID=193520.1
The court observed that directors serving on behalf of preferred shareholders may face a … Read more