Global Capital Markets Center
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Limiting Directors' Liability Deborah A. DeMott 66 Wash. U. L.Q. 295 (1988) |
ABSTRACT:
Written in response to a surge of cases in the mid-eighties that held directors personally liable for the competence and care with which they discharged their duties, Professor DeMott addresses possible ways to correct the deterrence to individuals to serve as directors and the increasing withdrawal by insurance companies of director and officer insurance that were created by this increased risk of liability. The article surveys current law reforms in several states, enacted in response to these problems, that modified director liability and re-worked director and officer insurance statutes to require or limit insurance for various types of potential defendants and cases. She examines the benefits, deficiencies and likely consequences of different types of statutes, each with a slightly different approach to the problem. In addition, there is a significant discussion of the discontinuity between this recently-enacted reform and the corporation law as it existed in several states at this time. The article suggests problems that might arise and corrections that may be needed in future drafts. Overall, it is a good survey of an important evolutionary step in director liability law.
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