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MEMORANDA ABOUT P.F.D. 1 (March-May 1992)

handle is hein.ali/alicgv0077 and id is 1 raw text is: TO: Members of the American Law Institute FROM: The Reporters for Corporate Governance Prior to the 1991 Annual Meeting, the membership had approved, on a tentative basis and subject to certain revisions, Parts II-VII of the Corporate Governance Project. At the 1991 Annual Meeting, the membership had before it Tentative Draft No. 11 of the Project, consisting of Parts I-VI, and Part VII, Chapters 3 and 4. Part VII, Chapters 1 and 2 (The Derivative Action; Recovery for Breach of Duty) were not formally included in Tentative Draft No. 11, because work was continuing on the black letter and the Comment was not ready. However, a revised version of the black letter was included as an Appendix. At the conclusion of the discussion of the Project at the 1991 Annual Meeting, the membership approved Parts I-VI, with the important exception that issues concerning the effect of ratification under Part V (Duty of Fair Dealing) were reserved for consideration in 1992, under the following resolution: Resolved, that Part I (except to the extent of definitions that are used primarily J n Part VII), Parts II through Part VI, and Chapters 3, entitled Indemnification and Insurance, and 4, entitled The Appraisal Remedy, of Part VII are approved, with only such changes as are consistent with the discussion during the day and yesterday; and with the understandings that (1) these Parts will not be brought before the membership again for further discussion or voting unless the Council so determines; but (2) the issue of ratification within Part V is subject to consideration in 1992, not 1991, to the extent that provisions of certain sections of Part V distinguish between the effect of advance approval and ratification. The enclosed Proposed Final Draft of the Corporate Governance project consists of the entire Project, that is, Parts I-VII. Parts I-VI embody changes generally made to reflect the discussion at the 1991 Annual Meeting, to incorpbrate new principles on the effect of ratification under Part V, to better reflect the underlying intention of various sections, to achieve gender-neutrality, and to solve-various technical problems that were called to our attention. A brief description of the more significant changes embodied in the Proposed Final Draft follows. Obviously, opinions may differ about what changes are more significant. While the Reporters have used their best judgment, a revision that the MAE: Reporters.mmo .arch 24, 199 1) ID P