Insights Publishes James Deeken Article on Director’s Duty of Care

Insights – The Corporate & Securities Law Advisor has published “Blue Bell Meltdown Serves Up a Double Dip of Danger for Directors” by Akin investment management partner James Deeken.

In the article, James examines two recent cases, Marchand v. Barnhill and Discover Property & Casualty Insurance v. Blue Bell Creameries. Both cases, according to James, “highlight the need for corporate directors to understand not only their duties but the scope of insurance coverage that applies, or in some cases does not apply, to those duties.” He writes on the concept that a director could be personally responsible for a mistake within the corporation they serve may contradict the common understanding of corporate law that most directors operate under while performing their duties.

James discusses how corporate directors often find assurance in the “business judgement rule,” which typically prevents a court from challenging a director's well-informed and good-faith business decision. James explains that it is important to note that this rule specifically pertains to the exercise of a director’s duty of care, not encompassing their duties related to loyalty or to act in good faith. He writes, “Perhaps even less commonly understood are the pitfalls that accompany the duty of loyalty and duty to act in good faith.”

To read the full article, click here. The article is copyright 2024 by CCH Incorporated. All rights reserved. Reprinted by permission of CCH Incorporated from Securities Regulation Law Journal.