Lori Marks-Esterman Quoted in Delaware Business Court Insider on Shareholder Options Regarding Corporate Officers’ Limited Liability
Delaware Business Court Insider (subscription required) quoted Olshan partner and Chair of Olshan’s Litigation Practice Group Lori Marks-Esterman in an article entitled “Shareholder Tensions Rise as Corporations Consider Limiting Officer Liability.” The article explores the recent amendment to Delaware’s corporate statute, which allows Delaware corporations to limit corporate officers’ liability, and the consequences for shareholders. Lori expressed surprise at the legislation’s passing, given the controversy surrounding the topic for the past few years, and noted: “The idea from the folks on the plaintiffs’ side of things was that officers, who are running the company day to day, should not have that same exculpation. This is their job,” she explains. “If [officers] breach  the[ir] duty of care, that matters. That can harm the company enormously, and they shouldn’t be exculpated. They should be obligated to hold themselves higher and comport with the duty of care in their day to day jobs, whereas directors fulfill a different role.” For companies that amend their charters to exculpate officers, she notes, shareholders will have one less avenue to seek redress for breaches of fiduciary duty, and conduct that implicates shareholder rights.