August 10, 2005
Responses to the “other Larry”
Posted by Elizabeth Nowicki

Larry, obviously you were asking difficult questions with no easy answers in the post below, but I wanted to respond to some of your questions because (a) they are thought-provoking and (b) I suspect I might be outside the bell curve with some of my responses. My numbers below mirror your numbers.

1. Yes, I am still reading. I found the opinion to be a fascinating work; kudos to Gordon for putting this responsive forum together.

2. Ditto.

2b. Yes and no. If the Van Gorkom case arose in today's 102(b)(7) world, the directors should still be liable under a correct interpretation and application of 102(b)(7). Do I think the majority of Delaware courts would ever reach that same conclusion? No.

3. Most (many?) of the officers implicated in the situations I assume you are envisioning would have been directors, right? (e.g. CEO, COO, who also sat on the Board) If those folks acted unilaterally when they held both titles, would you still be asking your question? (Your question being “First, how should the conduct of officers be judged when they act unilaterally?”)

4. Did anyone else take pause with the portion of the opinion to which Larry refers when he says “The Chancellor’s conclusion [re New Board] seems to rest heavily on authority concepts: even though the Board had concurrent power to act on the matter, he says, Eisner had the power as well, so the Board had no duty to act. (p. 168)”?

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