The Interrelationship of Exculpation and Aiding and Abetting Liability

The Interrelationship of Exculpation and Aiding and Abetting Liability

      In a recent decision from Delaware has highlighted the distinctions between exculpation and aiding and abetting liability, in this instance in the context of a Delaware business corporation. Essentially, while consequent to a 102(b)(7) provision in the certificate of incorporation the directors were protected from personal liability in approving a flawed transaction, a financial advisor, J. P. Morgan, could still be held liable for aiding and abetting the breach of fiduciary duty, in this instance because what it failed to be forthcoming with respect to its conflicts of interest. The decision is Morrison v. Berry, C.A. No. 12808-VCG, 2020 WL 2843515 (Del. Ch. June 1, 2020).

      The Morris James firm in Delaware has on its blog reviewed this decision in a posting titled  Court of Chancery's Sustained Aiding-and-Abetting Breach of Fiduciary Duty Claim Against Financial Advisor Based On Its Conflicts Of Interest In Going-Private Transaction, HERE IS A LINK to that posting.