Director Liability

Experienced Commercial Law Attorney Assisting Clients in Pleasanton

Helping to manage a company as a director can be an arduous yet rewarding job. It is a position that carries much responsibility. Sometimes directors are accused of taking improper actions on behalf of a company. If this happens, they should obtain experienced legal counsel who can help them defend against claims that they are liable for any alleged misconduct. Knowledgeable commercial law lawyer James G. Schwartz has been serving the Pleasanton business community for over 35 years. He has the necessary knowledge and expertise to help directors throughout the East Bay defend against liability claims by shareholders of their companies.

Protecting Directors against Claims by Corporate Shareholders

Directors handle the daily management of a company. They are responsible for creating and implementing its policies. Individual directors together form a board of directors that has the responsibility of reporting back to the company’s shareholders. Directors typically carry out tasks such as entering into contracts on behalf of the company and handling employee payroll issues, including vacation time or unpaid leave.

If the shareholders of the company believe that the directors have failed to properly perform these duties, they may bring a legal claim alleging that the directors have breached their obligations. While company directors usually carry insurance for this specific type of litigation, a defense against liability is the first step that they will take in most situations.

Generally, there are two types of potential director liability. There is liability for which the director can be indemnified by the company, meaning the company would either reimburse or cover the upfront cost of the defense of a claim. There also is a type of liability in which a director may not seek indemnity from the company and would have to incur the cost of litigation solely on his or her own.

A director may seek indemnity from the company for actions that were taken in good faith while he or she was acting on behalf of the company. Such alleged liabilities may include unlawful employment practices, unpaid wages and tax withholding, and general breach of contract claims. By contrast, examples of actions taken for which the director would be solely liable with no indemnity from the company might include misappropriation of company funds, commingling personal and private funds, and failure to disclose a potential or actual conflict of interest.

Often, directors will have liability insurance, called D & O insurance, to help cover the cost of defending claims, as well as the cost of any actual damages that may be awarded if the director is found liable. D & O insurance can cover situations involving both indemnity and non-indemnity liability.

Seek Guidance from a Pleasanton Lawyer When Facing Business Litigation

If you are facing a claim of liability for your actions as a company director in the Pleasanton area, it is essential to have an experienced business litigation attorney who can help you navigate the legal process. James G. Schwartz can analyze the details of your situation and craft a strategy to prevent or minimize your liability to corporate shareholders. Call us today at 925-463-1073 or contact us online to schedule a consultation. We also represent business directors elsewhere in the East Bay, including in Hayward, Oakland, Fremont, and Dublin.

Contact us for your Free Initial Consultation