ITT Directors Dodge Trustee's Suit Alleging Mismanagement
By Vince Sullivan (January 30, 2020, 7:06 PM EST) -- The former directors of for-profit technical college ITT Technical Institute escaped a fiduciary duty suit Thursday when an Indiana district court judge said their actions in the lead-up to the company's Chapter 7 filing were a valid exercise of their business judgment.
In an opinion from U.S. District Court Judge James Patrick Hanlon, the court said the board's decision not to fire CEO Kevin Modany in the face of accreditation issues and federal regulatory actions did not constitute a breach of the directors' fiduciary duty because it was a reasonable exercise of their business judgment.
Under Delaware law, directors are presumed...
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