Sky Blog
Corporate oversight under Delaware law rests on the two bases for liability, each identified in In re Caremark International Inc. Derivative Litigation (“Caremark”) and reaffirmed in Stone v. Ritter. The first is a failure to implement any reporting …
Under In re Caremark Int’l Inc. Derivative Litig., directors can be liable for failing to adequately oversee corporate compliance. While Caremark has famously been described as “the most difficult theory in corporation law upon which a plaintiff might hope …
If you practice securities litigation, you know the drill: When a stock’s value drops significantly after disclosure of adverse information, calculating damages typically focuses on the price decline itself, adjusted for market movements. In a new paper, I suggest this …
Earlier this year, Judge Reed O’Connor made headlines when he rejected a plea agreement between the Department of Justice (“DOJ”) and Boeing. O’Connor rejected the agreement because it required the DOJ to consider its DEI policies in selecting a corporate …
I argue in a forthcoming article[1] that when corporate misconduct results in someone’s death, resolving the ensuing criminal charges with a “C” plea bargain can be antithetical to the pursuit of justice. To support my argument, I examine one …
On March 11, 2008, Congress held its first ever hearing on corporate monitors. The hearing began with questions to John Ashcroft, the former U.S. Attorney General who then headed a law and consulting firm, about why he had been given …
The proposed amendments to Delaware corporate law have sparked intense debate among corporate legal scholars and practitioners. A flurry of commentary has focused thus far on the proposed changes to Section 144, which governs transactions with controlling shareholders. This post, …
The Department of Justice (“DOJ”) must make a decision on Boeing – and fast. It has only until July 7 to take action under the Deferred Prosecution Agreement (“DPA”) it signed with Boeing in 2021. Newspaper accounts disagree on what …
Five years ago, 346 people tragically died in two separate crashes of Boeing’s 737 MAX airplanes. Both crashes were due to seriously flawed design features and inadequate training for pilots. More recently, a harrowing incident occurred when a plug door …
The duty of good faith and oversight, which is a branch of the duty of loyalty, has been the subject of considerable litigation in recent years, with cases revealing significant information asymmetries between directors and management. These cases are subject …
On June 1, 2023, the Ninth Circuit held en banc that a forum selection clause requiring all derivative claims to be brought in Delaware state court—including federal securities claims that can only be maintained in federal court—is enforceable and requires …
How can shareholders hold directors accountable for paying insufficient attention to the broader interests of society? In the past few years, several ESG issues have become a source of major risk for companies and their shareholders. Even if the behavior …
In September 2021, the Boeing 737 Max debacle turned into an important moment in corporate law. A Delaware court allowed a derivative lawsuit brought by Boeing shareholders to proceed, based on the theory that Boeing’s directors breached their oversight duties …
In 1996, the Delaware Court of Chancery issued its seminal decision in In re Caremark International Inc. Derivative Litigation,1 establishing the conditions for director oversight liability under Delaware law. Adopted a decade later by the Delaware Supreme Court in Stone …
The Delaware Court of Chancery’s recent decision denying a motion to dismiss in In re The Boeing Company Derivative Litigation, 2021 WL 4059934 (Del. Ch. Sept. 7, 2021), reminds directors and their counsellors of the importance of board and …
In an important decision this week, the Delaware Court of Chancery permitted a Caremark duty-of-oversight claim to proceed against the directors of the Boeing Company. Stockholder plaintiffs sued Boeing’s board, seeking to recover costs and economic losses associated with the …
Members of the academic community, the business world, and law firms have long been debating shareholder primacy, stakeholder governance, and corporate purpose. In a forthcoming essay, I outline these arguments but suggest that reform of corporate governance should be focused …
The Boeing 737 Max scandal is one of the most serious corporate crises in U.S. history. While companies like Enron, Arthur Andersen, and Lehman Brothers were replaceable, Boeing is not. Consumers and airlines around the world now view the 737 …