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Changes in Georgia’s Law on Director Duties

June 30, 2017

Authors

Michael Carey

Changes in Georgia’s Law on Director Duties

June 30, 2017

by: Michael Carey

On July 1, 2017, significant amendments to the director and officer liability provisions of Georgia’s Financial Institution Code and Business Corporation Code will take effect.  These amendments, adopted as House Bill 192 during the 2017 General Assembly session and signed into law by Governor Deal in May, enhance the protections available to directors and officers of Georgia banks when they are sued for violating their duty of care to the bank.  The amendments also apply to directors and officers of Georgia corporations, including bank holding companies.

First and foremost, House Bill 192 creates a statutory presumption, codified at O.C.G.A. § 7-1-490(c) for banks and at O.C.G.A. §§ 14-2-830(c) and 14-2-842(c) for corporations, that a director or officer’s decision-making process was done in good faith and that the director

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Analysis of FDIC v. Loudermilk Decision

April 25, 2017

Authors

Michael Carey

Analysis of FDIC v. Loudermilk Decision

April 25, 2017

by: Michael Carey

The FDIC’s lawsuit against former directors and officers of the failed Buckhead Community Bank, one of the most closely watched Georgia corporate governance cases in years, went to trial in October, 2016.  The jury returned a verdict of nearly $5 million against the defendants for their role in the approval of four large commercial development loans that later defaulted.  FDIC v. Loudermilk, No. 1:12-cv-04156-TWT (N.D. Ga. Oct. 26, 2016).  It was less than a complete victory for the FDIC, which had sought over $21 million in damages based on ten bad loans, but the verdict nonetheless represents a significant recovery against directors and officers of a Georgia bank.  The case is all the more significant because it was the first known jury trial to evaluate a negligence claim under the business judgment rule

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