Directors Not Liable for Bad Decision In Rejecting Settlement of Lawsuit
Ohio Court cites doctrine of litigation privilege, but disclaims ability to provide indemnification
The Court of Appeals of Ohio has ruled that directors of a nonprofit trade association cannot be sued on behalf of the corporation for turning down a settlement offer in a defamation suit that would have saved the Association $43 million. But it has also ruled that it had no jurisdiction to force the Association to indemnify the directors who successfully defended the suit, saying that could be done only by a court in Delaware, the state of the Association’s incorporation.
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