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News < Back Compliance : Sarbanes Oxley : Law Director, Protect Thy Self Morrison & Foerster Attorneys Offer Some Basic rules to Live By For Board Directors in the Wake of Precedent-Setting WorldCom and Enron Settlements
The two cases involve the most notorious business failures of the last recent downturn. In the first, 10 former directors of WorldCom contributed $18 million of their own money as part of a $54 million settlement with shareholders. The second case had ten former Enron directors paying $13 million of their own funds in connection with a $168 million settlement. The lead plaintiffs in both cases were public employee pension funds who have been quoted as saying they intended the settlements to send a message to directors and to raise the standard for acceptable corporate management. ?While the WorldCom and Enron cases are, in many ways, extreme, directors of other companies will have to keep these cases in mind when they are dealing with embroiled in shareholder litigation should be prepared to receive demands for personal contributions towards settlements,? said Mr. Mattson, who serves as co-chair of the firm?s Corporate Finance group (pictured above). Can directors do anything do avoid the risk of losing personal assets? Here are some basic steps that Mr. Rains and Mr. Mattson suggest directors take to minimize their exposure:
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