When a Fund is Sued: An Independent Director’s Guide to Fund Litigation - Part 2
This article explains what funds’ independent directors should know about fund litigation. Part 1 appeared in the July 2010 issue of The Investment Lawyer, where the authors described the most-common types of claims against funds and the roles that independent directors play when these claims are asserted. The authors then described the differences between direct lawsuits against a fund and derivative lawsuits brought on behalf of a fund. Finally, in Part 1 of this article, the authors described how independent directors can form a special litigation committee with respect to a proposed lawsuit to recommend whether the fund should pursue the lawsuit and the possible benefits that can flow from such a committee.