Client Alert: Delaware Supreme Court Heightens Scrutiny of Director and Officer Actions

Client Alert: Delaware Supreme Court Heightens Scrutiny of Director and Officer Actions

Mar 16, 2009

Article

Brownstein Client Alert, March 16, 2009
The Delaware Supreme Court's recent decision in Gantler v. Stephens, C.A. No. 2392, (January 29, 2009) offers important new guidance to corporate officers and directors. First, the Court explicitly held for the first time that officers have fiduciary duties to shareholders that are identical to the duties of directors. Second, the Court limited the ability of shareholders to ratify board action to resolutions that do not legally require shareholder approval and that the board explicitly asks shareholders to ratify. This holding has far reaching implications and may expose officers to far greater liability.

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