Abstract
Derivative suits were designed to remedy breaches of corporate directors' fiduciary duties. However, an overly aggressive derivative suit plaintiff lawyer (analogized in this Article to a hypothetical Wild West bounty hunter) can, in the course of prosecuting a derivative suit, impose significant over-enforcement costs on the corporation itself. To alleviate these costs, courts have placed significant hurdles in front of would-be private attorneys general. However, these hurdles can lead to under-enforcement costs, particularly to the extent that SLCs disregard the value to diversified shareholders of general deterrence of fiduciary breaches. Therefore, this Article has recommended that existing special litigation committees be supplemented with representatives appointed by securities exchanges, to create ESLC.
Recommended Citation
Hawkins, Lawton W.
(2003)
"Exchange-Enhanced Special Litigation Committees: Enforcing Fiduciary Duties Amid a Crisis of Trust,"
Utah Law Review: Vol. 2003:
No.
2, Article 2.
Available at:
https://dc.law.utah.edu/ulr/vol2003/iss2/2