Disney has been appealed.  If there's no settlement, I expect affirmance. As others (e.g, Larry H) have observed, the fact that Chandler held a trial, the embarassment of the trial itself, and Chandler's strong normative language are likely to have an effect on corporate practices.  Unless there's some change in the environment, I doubt the Supreme Court will think a reversal necessary to send a message.

One thing that might provoke the Supreme Court to stronger action is, as Mark Roe would say, some federal rumblings.  But the fallout from Sarbox has not been good, and I doubt Cox is going to be pushing major SEC initiatives into internal corporate governance.

If it does act, the Supreme Court may try to clarify good faith.  But what can it do?  The key to the case is the holding, not the rule.  If the defendants are not liable, they have been exonerated in the face of some pretty strong facts for abdication of the board's supervisory role, whatever the court says the rule is. 

That's why this case is so important (as I've said, the case of the decade).  It presented both high profile and the exact right facts to test whether there was anything left of a non-loyalty fiduciary duty.  Van Gorkom is finally dead, a stake through its heart. 

The case is also important because of its timing. Together with the Cox ascendancy and the chastening effect of the Sarbox fallout, this opinion marks the official end of the Enron era.

Forum: Disney | Bookmark

TrackBack URL for this entry:
https://www.typepad.com/services/trackback/6a00d8345157d569e200d83423fb7d53ef

Links to weblogs that reference The appeal and beyond: the end of the Enron era: