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In 2013, SDNY judge dismissed the claims filed by the private plaintiffs. According to the decision, the banks did not violate antitrust laws when they colluded to manipulate the Libor benchmark interest rate and that the plaintiffs had failed to show harm from such collusion. The appellate court disagreed. After determining that the plaintiffs had sufficiently shown harm from the manipulation, the panel sent the case back to the lower court.
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Fundamentals of Corporate Law 2019-20 32 Topic 2: Corporate Liability vs. Legal Risk Management Disney Trouble in the Magic Kingdom In 1984 Michael assumed the position of Chairman and Chief Executive Officer of The Walt Disney Company and remained in this position until 2005. In 1995 Eisner recruited his friend Michael Ovitz, co-founder of the CAA (Creative Artists Agency). Ovitz received the title “president” and joined the board. Without much consultation of the remaining board members, Ovitz negotiated a very favorable pay package with Eisner despite the chairman of the board’s remuneration committee Mr Irwin Russell cautioning that the pay was significantly above normal levels and "will raise very strong criticism". Further, a compensation expert had warned Eisner that Ovitz was getting "low risk and high return" but his report was not circulated to other board members. The Eisner- Ovitz “dreamteam” did not last long: 14 months later Ovitz left Disney in December 1996 by termination without cause. Despite alleged poor performance he obtained a severance package of about 38 million USD in cash and 3 million stock options worth about 100 million USD at the time of Ovitz’s departure. Shareholders of Disney initiated a derivative suit against the members of the board of the Walt Disney Company arguing that the board members breached their duties. Case Reading Refer to the judgment In Re the Walt Disney Company Derivative Litigation , 907 A.2d 693 (Del. Ch. 2005) to answer the Questions. - derivative-litig Questions 1. Summarize the facts surrounding the hiring of Michael Ovitz.
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Fundamentals of Corporate Law 2019-20 33 2. Why did the relationship between Ovitz and Eisner deteriorate? 3. Summarize the circu mstances of Ovitz’s termination. 4. Who are the plaintiffs and who are the defendants of the litigation? 5. What is a derivative action? 6. What is the business judgment rule? 7. Why did Ovitz not breach his duty of loyalty? 8. Why did Eisner not breach any duties under Delaware corporate law? 9. What is the difference between a legal standard of duty and best practices in corporate governance?
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Fundamentals of Corporate Law 2019-20 34 Topic 2: Corporate Liability vs. Legal Risk Management Toyota Toyota Skids on Legal Risk The following slides are taken from an internal and confidential Toyota document entitled “Wins for Toyota”, dated July 6, 2009. The presentation is made on behalf of J. Cooper, Group Vice-President, Public Policy & Government/Regulatory Affairs. It lists Yoshi Inaba, Toyota's chief executive in North America, on its cover.
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