Chancery Imposes Same Fiduciary Duty on Officers as Directors
Midland Grange No. 27 Patrons of Husbandry v. Walls, 2008 WL 616239 (Del. Ch., Feb. 28, 2008), read opinion here. This Delaware Chancery Court decision involves claims against officers of a fraternal non-profit organization for breach of fiduciary duty in connection with the transfer of property in alleged violation of the group's bylaws. The nugget of this case is the recitation by the court that regardless of whether the defendants were considered officers or directors, their fiduciary duties would be the same (see page 8 of attached Westlaw version of the case). The court cited Ryan v. Gifford for support in making this statement of Delaware law. (That case has been the subject of many decisions, but the one cited was highlighted here.) See Ryan v. Gifford, 935 A.2d 258, 269 [n.27] (Del. Ch.2007) (quoting In re Walt Disney Co., 2004 WL 2050138, at *3 (Del. Ch. Sept. 10, 2004)).
This statement of Delaware corporate law is important because the fiduciary duties of officers, as opposed to directors, has not been as fully developed in the case law. See, e.g., a recent scholarly article by Lyman Johnson addressing that point, here.
