A recent decision by the Delaware Chancery Court that exempted corporate directors from liability in the current financial mess could prove helpful to other directors facing similar sub-prime and credit crisis-related derivative claims.
In a 58-page decision that provided some of the court’s most expansive comment ever on the subject, the Chancery Court ruled Feb. 24 that the business judgment rule protects the directors of Citigroup from shareholder lawsuits over how the bank managed—or more accurately, mismanaged—the risks involved in the sub-prime mortgage market.
