Title

A Neglected Policy Option: Indemnification of Directors for Amounts Paid to Settle Derivative Suits - Looking Past 'Circularity' to Context and Reform

Document Type

Article

Publication Date

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.

Comments

Copyright 1995 San Diego Law Review. Posted with the permission of the San Diego Law Review. Personal use of this material is permitted. In addition, permission to reprint/republish this material for advertising or promotional purposes or for creating new collective works for resale or redistribution to severs or lists, or to reuse any copyrighted component of this work in other works must be obtained from the San Diego Law Review. Hard copies and or electronic download of this article must be obtained by contacting the William S. Hein Co. at htt;p:llwww.wshein.com/or EBSCO at http://ejournals.ebsco.com/home.asp or Lexis/Westlaw.