Bankrupt Teligent Wins Round Against Board That Oversaw Collapse

Teligent Inc.'s bankruptcy administrator won a preliminary ruling Tuesday against former company leaders who allegedly did almost nothing to address the regulatory violations that drove the drugmaker into insolvency.

A judge let the lawsuit move forward with claims Teligent’s board made virtually no effort to monitor mission-critical compliance risks involving years of severe manufacturing deficiencies. Lack of oversight is a notoriously hard theory to win on—it requires proving total inattention to core business matters, not mere negligence—but the allegations clear that high bar if true, according to the 29-page opinion for Delaware’s Chancery Court.

“Although a board has great latitude ...