August 1, 2008

Potential Personal Liability for Directors: Selling the Company

Kudos to Francis Pileggi and his “Delaware Corporate and Commercial Litigation Blog” for highlighting a new Delaware Chancery Court case that exposed independent directors of a public company to personal liability in a M&A context; a topic that always gets people’s attention.

In Ryan v. Lyondell Chemical Company, (Del. Ch. Ct., 7/29/08), the Delaware Chancery Court found that at the procedural stage of a summary judgment motion, the issue of whether independent directors should be exposed to personal liability for their role in the sale of the company can proceed to trial – despite selling the company to the only known buyer for a substantial premium. We have posted the opinion in’s “Litigation” Portal.

Here is more from Francis in his blog – and some analysis from Ideoblog and Legal Profession Blog.

SEC Approves Nasdaq’s Revised SPAC Listing Standards

Earlier this week, the SEC approved Nasdaq’s proposal to adopt new listing standards for SPACs. The approved listing standards are slightly different from what was originally proposed including:

– reduced amount of gross proceeds that must be deposited from 100% to 90%
– clarified period in which SPAC must complete one or more business combinations
– required all listed SPACs contain provisions allowing shareholders to convert shares into cash if they vote against a business combination

Another SEC Commissioner Sworn In

Yesterday, Luis Aguilar was sworn in as a SEC Commissioner. Only one more to go…

– Broc Romanek