Venable partner Eric Berman was quoted in an April 21, 2017, Insurance Journal article on management liability suits. The most common reason for such suits include failure to pay satisfactory dividends, denial of rights to minority shareholders, and excessive compensation for executives.
According to Berman, when it comes to director and officer liability, "the line between for-profit and nonprofit is becoming so blurred as to make them indistinguishable." He noted that state attorneys general have become more aggressive in the ways they investigate nonprofit fundraising and spending. "If [directors] stick their heads in the sand, that can be held to be willful and wanton conduct," he said. "If the Federal Trade Commission is investigating your charity, you're really in trouble," he added. "That's because the federal government has already determined you're not operating according to your charter, but as a for-profit."