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ARTICLE · 30 APRIL 2013

Don’t Be A "Dummy Director"

McCarthy Tétrault
McCarthy Tétrault
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A recent Delaware bench ruling considers some of the issues highlighted by fraud allegations against emerging market issuers.

CanadaCorporate/Commercial Law

Delaware ruling on the obligations of directors of companies operating in emerging markets.

"Independent directors who step into these situations involving essentially the fiduciary oversight of assets in other parts of the world have a duty not to be dummy directors." p. 21 of transcript, In re Puda Coal Stockholders Litigation, Del. Ch. C.A. 6476-CS (February 6, 2013).

A recent Delaware bench ruling considers some of the issues highlighted by fraud allegations against emerging market issuers like Sino-Forest Corporation and Zungui Haixi Corporation, and the Ontario Securities Commission's recently issued Staff Notice 51-720 – Issuer Guide for Companies Operating in Emerging Markets.

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