Directors Liability Consulting

It is imperative that directors and officers of privately held companies understand the full scope of their personal exposure to executive liability as interpreted by the courts. Directors and officers’ personal assets are at risk from these suits that may include allegations including unfair trade practices, antitrust, fraud, and defamation or breach of contract. Deltennium specializes in solutions-focused consultation services aimed at reducing the liability risks your directors and officers may face, including claims from employees, shareholders, and government agencies.

Directors and officers of corporations face serious scrutiny in today’s ever-changing business environment. Deltennium’s team of experienced intermediaries will be involved from start to finish providing effective and efficient consultation, while offering creative insights and expert counsel. We engage professional standards in providing you with a detailed analysis of every available option to manage your exposures, including non-traditional risk financing approaches.

First and foremost, we assist your corporation’s directors in securing some form of Directors and Officers Liability Insurance if they have not already done so; that way, they can afford expert legal defense should the need arise. Acquiring D&O insurance lessens the chance of exposing the personal assets of one’s self, one’s spouse and one’s estate to the risk of uninsured loss. Without this coverage, the corporation and its shareholder owners/operators often struggle with the litigation and settlement costs that they ultimately might not be able to afford.

Allegations against directors and officers have largely been employment-related in recent years. This is generally in regards to employment practices issues such as termination, harassment, and discrimination. Also, the number of shareholders of the private company and the amount of capital invested should also be considered, since the more stock that is held outside of the founders and insiders, the greater the risk of litigation.

As for shareholder claims, even if the corporation is not publicly traded, it does not mean that it has not issued a "security" that is subject to U.S. securities laws. Actually, directors and officers of privately held corporations owe the same duties to shareholders as do their counterparts at publicly held corporations. Additional shareholder litigation can arise from situations such as private placements, hostile takeovers and failure to complete an IPO.

Deltennium also assists in providing counsel and formulating a strategy that effectively addresses specific claims that are in recent years being brought directly against the directors and officers of privately held companies by government agencies. Violations of regulatory acts, monopolistic practices, and other charges might possibly create additional liability for the company and directors and officers as individuals.

Unfortunately, in today’s fickle legal and regulatory environs, the risk of suits and allegations is higher than ever. Now more than ever, directors and officers should not operate without the benefit of strategic advice and sound solutions should the possibility of litigation emerge. Deltennium’s consultation programs are designed to help protect the personal assets of a privately owned company’s directors and officers, as well as the financial well being of the company itself.

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