Businesses rely on their directors and officers to successfully lead them, so any claim of officer liability needs to be handled by a skilled lawyer. The law imposes a higher responsibility to the company and its shareholders on an officer than other employees. Officers are trusted with making important decisions and protecting corporate interests. If an officer fails to put the company’s interests first, they can be held responsible for any damage they cause.
Robert Burford has defended corporate officers in significant officer liability cases. For example, In re Azurix Corp. Securities Litigation, he obtained pretrial dismissal of a multi-million dollar securities claim against Azurix, Ken Lay, Jeff Skilling and Rebecca Marks in a securities fraud action brought by Azurix shareholders in the company’s IPO. Burford Perry currently represents numerous high-level executives in suits brought against and on behalf of the corporations employing them.
Directors and officers have the power to take a company to new heights or bring it crashing down. Because of this power, officers are required to put the company’s and its shareholders’ interests first and cannot prioritize their own self-interest. These officer responsibilities are called fiduciary duties. Broadly, an officer owes a company three fiduciary duties: the duties of obedience, loyalty, and due care.
Sometimes a business decision made by an officer turns out to be detrimental to the company, but this does not necessarily mean the officer is in breach of their duty. Directors and officers are given a level of protection when making corporate decisions: the Business Judgment Rule presumes that an officer’s decision is made on an informed basis, in good faith, and in the honest belief that the action taken was in the best interest of the company.
In order to determine whether or not an officer faces legal liability for a company decision, you will need an experienced officer liability lawyer to investigate the circumstances of the decision.
A company usually protects its own interests in the face of a misbehaving officer. But sometimes it is controlled or dominated by the officer or director accused of misdeeds. In these situations, a company’s shareholders may need to file a lawsuit in the name of the company to defend its rights and protect its assets. A shareholder claim filed for the company is called a “derivative” suit and has specific requirements that must be met before filing suit. The entire suit can be dismissed if these requirements are not met. Burford Perry has extensive experience prosecuting and defending shareholder derivative litigation and can walk you through the process.
Officer liability arises when employees, shareholders, or other officers believe an individual officer acting on behalf of the company acted in his or her own self-interest. Some of the most common officer liability claims include:
Officer liability cases are rarely simple. The officer involved will usually claim he or she operated by the standards of the Business Judgment Rule. To prove the officer acted in his or her self-interest or outside of their given authority, and did not simply make a poor business decision, you will need the help of an experienced officer liability lawyer who can conduct a thorough investigation and analyze the circumstances of the case. For officers accused of acting for their own benefit, it’s important to immediately contact an attorney to protect your rights and give you the best defense.
At Burford Perry LLP, our lawyers have extensive experience both defending officers from liability claims and pursuing claims of officer liability for companies or shareholders. This gives us insight into how the other side will approach a claim and how to best pursue resolution. If you are dealing with an officer liability claim or suspect an officer has acted in his or her own self-interest, call Burford Perry LLP today to schedule a confidential consultation to discuss your case.
 Gearhart Indus., Inc. v. Smith Intern., Inc., 741 F.2d 707, 719 (5th Cir. 1984).
 Gearhart, 741 F.2d at 719.
 Gearhart, 741 F.2d at 719.