Directors Obligations and Lord Black

noreply@blogger.com (Unknown) — Wed, 02 May 2007 17:40:00 +0000

Like many people in Toronto, I have been following the Conrad Black trial in Chicago with great interest. Lord Black's highly publicized trial is of great interest to his friends and foes alike.

From the outset, I confess that I have been puzzled by the zeal with which the US prosecution team has pursued Lord Black. Don't misunderstand me here. I am not expressiong any opinion on whether or not he was justified in taking a trip to Bora Bora on the corporate jet or whether he was entitled to the non-compete payments we have read so much about.

Rather, I have been puzzled by the fact that the former management of Hollinger is being vilified while the directors and their obligations to the company and the shareholders are being virtually ignored.

If the directors are essentially trustees of the company's assets, why on earth did the directors not examine the documentation that discussed the payments in some detail? Why were these payments apparently approved (with directors' signatures on documents filed with the SEC, no less), when each of the three members of the audit committee have now testified, as I understand it, that they did not know about these payments?

If the directors did not do their job as trustees of the corporate assets, should this absolve Lord Black from criminal liability (if such liability exists, about which I am somewhat sceptical)? I tend to think that the answer is yes.

Management is supposed to work with the board, and it seems to me that in these circumstances, both sides owed a responsibility to the company and its shareholders to make sure that everyone was reading from the same playbook.

I certainly hope the jurors understand this issue! I will be very interested to learn of the verdict in this case.

Welcome!

noreply@blogger.com (Unknown) — Wed, 02 May 2007 15:13:00 +0000

My inaugeral post!

I invite you to join me as I explore issues of interest in the legal sphere.

But for now, the cost of a lawyer's missing pants:

http://www.washingtonpost.com/wp-dyn/content/article/2007/04/25/AR2007042502763.html

Enjoy!

Toronto Litigation Lawyer

Directors Obligations and Lord Black

Welcome!