Officers and Directors of Corporations Can Breathe a Little Easier - Good Faith Presumption is Now Law in Georgia
Miller & Martin PLLC Alerts | July 05, 2017
Author: Neil Wilcove
In response to FDIC v. Loudermilk, 295 Ga. 579 (2014), the Georgia Legislature enacted and Governor Deal signed into law HB192, which went into effect on July 1, 2017. The law is designed to protect decisions made by officers and directors of corporations, banks and trust companies when those officers and directors discharge their duties in good faith and with the degree of diligence, care and skill that an ordinary prudent person would exercise under similar circumstances.
The law in Georgia now presumes that the decision making process is done in good faith. The good faith presumption can only be rebutted by evidence of gross negligence by a showing of a gross deviation from the standard of care of a director or officer in a like position under similar circumstances. This is a heightened standard by which people must prove the liability of an officer and/or director based upon decision making processes that end up being wrong. The legislature and Governor decided that just being wrong about a decision should not subject the officer or director to liability for that decision. Gross negligence must be shown.
Please contact Neil Wilcove, or your Miller & Martin attorney, for further information regarding this new Georgia law.