The business judgment rule in Florida - on paper and in the trenches.
Florida Bar Journal › Vol. 80 Nbr. 7, July 2006
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The business judgment rule in Florida - on paper and in the trenches.
Enron, Worldcom, Tyco Industries (of $15,000 umbrella-stand fame), and other corporate scandals notwithstanding, the business judgment rule remains alive and kicking in Florida. The business judgment rule protects directors from personal liability for most of their actions. The rule seemed headed for life support in the wake of all the highly publicized corporate boardroom scandals and passage of the federal Sarbanes-Oxley Act of 2002, but last August the rule seemed to gain a new lease on life, at least for the time being, thanks to an important Delaware court decision.
Although its tenets are business-friendly, the business judgment rule presents hard challenges in litigation both for counsel representing defendant directors and counsel representing plaintiff shareholders (or others). In the practical litigation world (the trenches), the protections of the business judgment rule are not always what they are cracked up to be. Motions to dismis...See the full content of this document
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