A Neglected Policy Option: Indemnification of Directors for Amounts Paid to Settle Derivative Suits - Looking Past 'Circularity' to Context and Reform
70 Pages Posted: 10 Mar 2009
Date Written: November 1, 1995
Abstract
Permitting corporations to indemnify directors for amounts directors pay to settle derivative litigation may have merit, despite the consensus against it. It yields more cheaply the same corporate recovery - zero - as a court dismissal. Thus, notwithstanding risks, it is not patently worse than current termination options. Moreover, a board's considering it may pose sharply the question whether no-recovery termination is defensible.
Keywords: indemnification, derivative, circularity, strike suit, special litigation committee, accountability, director, dismissal, liability, exculpation
Suggested Citation: Suggested Citation
Kuykendall, Mae, A Neglected Policy Option: Indemnification of Directors for Amounts Paid to Settle Derivative Suits - Looking Past 'Circularity' to Context and Reform (November 1, 1995). San Diego Law Review, Vol. 32, No. 4, 1995, Available at SSRN: https://ssrn.com/abstract=1355966
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