Escalating Risks for Directors and Officers in Shareholder Derivative Actions

January 8, 2016Articles Inside Counsel

2015 is likely to be remembered as a year in which directors and officers, as well as their insurers, kept watch over two significant developments that raised the stakes and created new exposures in shareholder derivative litigation, putting both sides at more risk than ever before.

First, two of the largest shareholder derivative action settlements in history—$275 million and $154 million—recently occurred. Second, at the same time, courts are increasing the risk for shareholders bringing derivative actions by upholding fee-shifting bylaws, which allow corporations to seek legal fees from unsuccessful shareholder plaintiffs.

Click here to read full article