FSG academic affiliate Professor Ralph Walkling and Principal Gary Stahlberg were engaged by attorneys at Keating Muething & Klekamp (“KMK”) to provide expert analysis on behalf of defendants in a corporate governance matter involving claims of director and officer liability. The plaintiff was the trustee for a company that failed in 2008; defendants were certain directors and senior executives of the firm.
Professor Walkling is the Stratakis Chair in Corporate Governance and Accountability at Drexel University in Philadelphia and Executive Director of the Center for Corporate Governance at Drexel’s LeBow College of Business. He was engaged to provide an opinion as to the governance standards applicable to the proposed sale or recapitalization of a firm in which a director has a personal interest as a potential investor. The FSG team supporting Professor Walkling, managed by Principal Stahlberg, investigated whether the company’s board of directors had exercised appropriate care and whether inappropriate influence by directors or officers prevented the successful sale of the firm before it failed. The FSG team also was asked to respond to the opinions of the plaintiff’s expert regarding issues of corporate governance and damages.
Based in part on issues raised in Professor Walkling’s report, counsel at KMK moved to exclude the testimony on damages proffered by the plaintiff’s expert. Professor Walkling’s report established, among other things, that those opinions were not based on reliable methods or sufficient facts and data. The U.S. District Court for the Southern District of Ohio agreed and excluded the challenged testimony as unreliable. Ruling that the plaintiff had failed to show damages, the court granted summary judgment in favor of the defendants on the five counts involving governance issues analyzed by Professor Walkling and Mr. Stahlberg.
Attorneys at KMK praised the “excellent work and work product” of the FSG team, which they said provided “a great benefit to the clients.” This is the second engagement involving corporate governance issues undertaken by Professor Walkling and Mr. Stahlberg in the last three years, and both have resulted in favorable outcomes for FSG’s clients.