Breach of Fiduciary Duty Claims May Proceed Against Resigned Directors

Posted & filed under Fiduciary Duty.

columnsAre you a shareholder who suspects one or more directors of a corporation have breached their fiduciary duties to you, but feel that you have no recourse because they have resigned?  If so, you may be in luck.  A recent Delaware case found that a company’s directors can still be held personally liable for acting in bad faith and failing to exercise oversight of the corporation, even after they resign from the Board.  Thus, directors cannot automatically exonerate themselves by resigning.  While Georgia law is not identical to Delaware law, Delaware is an innovative leader in corporate law, and this case could represent a hopeful trend for shareholders seeking recourse against directors who resign when facing trouble.

This article is not intended to establish an attorney-client relationship and is not intended to confer legal advice. No attorney-client relationship should be inferred in the absence of a written and executed engagement agreement that expressly indicates the creation of an attorney-client relationship.

Written by: Heather Wagner