Bowditch & Dewey
Mary-Pat Cormier, Robert D. Cox &
Jennifer L. Garner
May 8, 2015
Last week, Corporate Counsel published an article that we wrote on environmental liability exposures for corporate directors and officers. Companies and their directors and officers are subject to regulatory scrutiny by a variety of state and Federal regulators, including the EPA as well as the SEC, both of which have indicated an enhanced enforcement agenda. Coupled with that increased regulatory emphasis is the potential for tag-along shareholder litigation against directors and officers: (1) Securities class actions arising out of alleged failures to disclose environmental risks and liabilities, including scrutiny by state and federal regulators and compliance with state and federal environmental regulations; and (2) Derivative claims against directors and officers for breach of fiduciary duty, waste of corporate assets (for payment remediation, cleanup and penalties) and unjust enrichment, as well as significant and potentially costly corporate governance changes.