The Role of Independent Directors in Mitigating Liability Arising from Restructuring Decisions
Author: Michael R. Handler.; Arthur J. Steinberg.
Source: Volume 38, Number 11, November 2022 , pp.113-119(7)
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Abstract:
In this article the authors begin by discussing the law relevant to board decision-making when a corporation is in distress, the fiduciary duties of directors, and the important role of the independent director in the bankruptcy process. They then turn to detailed discussions of the recent D&O litigation challenging restructuring decisions in the Toys “R” Us and SportCo Holdings chapter 11 plans. They conclude with steps boards can take to mitigate the risk of liability in connection with negotiating and approving restructuring transactions.Keywords: Distressed Company Governance; Breach of Fiduciary Duty Litigation; SportCo Holdings; Toys “R” Us
Affiliations:
1: King & Spalding LLP; 2: King & Spalding.