Gall v. Exxon

418 F.Supp 508 (1976)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

P's complaint arises from an alleged payment by D of $59 million in corporate funds as bribes or political payments to Italian political parties and others to secure special political favors as well as other allegedly illegal commitments. P demands that Ds be held jointly and severally liable for damages, including loss of goodwill, allegedly suffered by Exxon. P also demands immediate election of four new members of the Board of Directors and, within 12 months, the election of a new Chairman of the Board and President, and reconstituting the composition of the membership of the Board of Directors and Executive Committee, such that at least 55% of the Board and the Executive Committee be made up of independent outside directors. D's Board unanimously resolved to establish a Special Committee on Litigation to determine if the matter should be pursued legally by Exxon. They discovered D officials paid $59 million to Italian political parties by a number of secret and illegal subterfuges. It was clear that several of the D directors named as defendants in the suit were aware of the existence of the political payments in Italy prior to their termination in 1972. The Special Committee unanimously determined that it would be contrary to the interests of D and its shareholders for D, or anyone on its behalf, to institute or maintain a legal action against any present or former D director or officer. P filed the complaint and D moved for summary judgment, claiming the committee's decision was within the sound business judgment rule.