Bell Atlantic Corp. v. Bolger
United States Court of Appeals for the Third Circuit
2 F.3d 1304 (3d Cir. 1993)
Shareholders of Bell Atlantic Corp. (defendant) brought a derivative suit against Bell Atlantic and its individual directors, seeking to recoup money the company paid to settle claims with the Pennsylvania Attorney General, on the theory that the settlement resulted from the directors' breach of their duty of care. The same law firm, Dechert, Price & Rhoads, represented both the corporation and the individual director defendants throughout the case, which settled. Shareholder Seymour Lazar objected to the settlement, arguing the joint representation created an impermissible conflict of interest; the district court approved the settlement over his objection, and Lazar appealed.
Whether a corporation's individual directors must have separate counsel from the corporation in a derivative suit that does not allege serious wrongdoing such as fraud, intentional misconduct, or self-dealing.