In Kandell v. Niv, the Delaware Chancery Court held (HT: Pileggi):
Where directors knowingly cause or permit a Delaware corporation to violate positive law, they have acted in bad faith, and are liable to the corporation for resulting damages.
Sigh. This is a topic on which I have written occasionally on this blog, but maybe it needs a law review article. Until then, may I implore Delaware jurists and lawyers to consider the arguments in these posts?
Can directors of corporations be held liable to shareholders when the corporation breaks the law
My earlier post on the corporate law aspects of the VW diesel engine scandal assumed away the issue of corporate criminality. Prompted by a complaint from my friend and coauthor Bill Klein. however, I'm revisiting the question and this t...
Does an Intentional Violation of Law = Bad Faith?
One of the most important aspects of Delaware Supreme Court Justice Jack Jacobs' opinion in the Disney case is his analysis of the directors' duty of good faith. My friend Wisconsin law professor Gordon Smith suggests that Jacobs' ...
