A federal appeals court recently handed down a chilling reminder of the risks inherent in failing to address conflicts of interest and process issues in distressed venture capital and private equity financings. In CDX Liquidating Trust v. Venrock Associates, No. 10-1953 (March 29, 2011), the U.S. Court of Appeals for the Seventh Circuit reversed a defense judgment and sent the case back for retrial, reviving the VC directors’ exposure to fiduciary duty liability and their funds’ exposure to aiding and abetting liability.
Source: Foley & Lardner LLP
