Professor Bainbridge's Quibble Might Be No Quillet

Allen Matkins
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Allen Matkins

In this post, UCLA Law School Professor Stephen Bainbridge quibbles my description of Delaware's two-step approach to the special litigation committee defense in derivative suits.  In particular, he points out that Delaware not only adds a second step to the New York test adopted in Auerbach v. Bennett,  393 N.E.2d 994 (1979), it modifies the first step such that the Court of Chancery will look not only into the independence and good faith of the committee, it will also inquire into the bases supporting the committee’s recommendations.

Professor Bainbridge described this as a "quibble", but that is either a catachresis or an understatement.   "Quibble" has two meanings.  One is an evasion of an issue or point.  The second is a small objection, a cavil or quillet.  I suspect that Professor Bainbridge intended the latter rather than the former.  In practice, however, the modification of the first step of Auerbach may be more than a quillet because Delaware's additional inquiry could result in a failure of the special litigation defense.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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