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House narrows corporate-liability exposure for officers and directors with clarifying amendment
Summary
House Bill 137, addressing officers' and directors' liability standards, was amended to add 'assignee or successor in interest' and passed the House 67–1; sponsors said the bill preserves liability for willful, gross negligence or wanton reckless conduct while protecting prudent corporate governance.
The House passed House Bill 137 after adopting sponsor-led amendments clarifying the statute's language on officer and director liability.
Representative John L. Valentine, sponsor of the bill, proposed adding the phrase "or any assignee or successor in interest thereof" to committee amendments to ensure the measure protects corporate officers and directors from liability for ordinary business decisions while leaving intact liability for willful or grossly negligent conduct. Valentine said the change responds to litigation trends that had extended liability in some cases and made it harder to attract qualified corporate leaders.
"The committee was concerned about this particular bill somehow insulating against liability to third parties... There was no way in the intent of this sponsor to affect that area of liability," Valentine said, explaining the amendment's intent to limit the change to corporate internal governance while not shielding officers from liability for willful, gross negligence, or wanton reckless conduct.
After the amendment was adopted by voice vote, the House voted on the bill. The floor announced the tally as 67 aye votes and 1 nay; House Bill 137 passed and will be referred to the Senate.
