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Duty of Loyalty Board of Directors Shareholder Litigation

Morris James LLP

Chancery Dismisses Oversight Claim Based on Board’s Response to Red Flags

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In re McDonald's Corp. Stockholder Derivative Litig., CA No. 2021-0324-JTL (Del. Ch. March 1, 2023) - A plaintiff can plead an oversight claim against a board by alleging particularized facts to support an inference that...more

The Volkov Law Group

Delaware Court Extends Caremark Duty of Oversight to Senior Officers

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In a far-reaching decision with significant implications, the Delaware Chancery Court recently issued a decision confirming that Caremark duty of oversight obligations extends to senior officers.  This will have an immediate...more

A&O Shearman

Delaware Court Of Chancery Declines To Dismiss Breach Of Fiduciary Duty Claims Against Nondirector Officer, Holding That Officers...

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On January 25, 2023, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery denied a motion to dismiss a derivative suit brought by stockholders asserting breach of fiduciary duty claims against a former officer...more

Goodwin

Delaware Court of Chancery Finds for the First Time That Officers’ Fiduciary Duties Include Caremark Duty of Oversight, and That...

Goodwin on

On January 25, 2023, in In re McDonald’s Corporation Stockholder Derivative Litigation, Vice Chancellor Travis Laster of Delaware’s Court of Chancery denied a motion to dismiss a derivative lawsuit against David Fairhurst,...more

A&O Shearman

Delaware Court Of Chancery Dismisses Breach Of Fiduciary Duty Claims Against Special Committee Defendants For Failure To Plead...

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On November 30, 2022, Vice Chancellor Glasscock of the Delaware Court of Chancery granted a motion to dismiss claims asserted against directors who served as members of the special committee (the “Special Committee”) of...more

Faegre Drinker Biddle & Reath LLP

The Corporate Guide: Rule 23.1 and Dealing With Stockholders Demanding Derivative Action

What should our board do first when served with a stockholder demand under Rule 23.1? • Directors must determine the legal, financial and factual issues relevant to the board’s response. ...more

Akin Gump Strauss Hauer & Feld LLP

In re Boeing: Revisiting Potential Director Liability Exposures

Recent rulings underscore the attention boards of directors and management must continue to pay to the risks faced by companies across all sectors of the economy and their potential impact on business operations...more

Skadden, Arps, Slate, Meagher & Flom LLP

The Risk of Overlooking Oversight: Recent Caremark Decisions From the Court of Chancery Indicate Closer Judicial Scrutiny and...

In 1996, the Delaware Court of Chancery issued its seminal decision in In re Caremark International Inc. Derivative Litigation, establishing the conditions for director oversight liability under Delaware law. Adopted a decade...more

Benesch

Shareholders Seek to Hold Current and Former SolarWinds Officials Liable for Massive 2020 Security Breach

Benesch on

Investors filed a derivative suit claiming that the company knew about, and failed to mitigate known, existing cybersecurity risks and shortfalls prior to the security breach. In early November, pension funds and...more

Cooley LLP

Blog: Pleading Bad Faith Against Special Committee Members: A New Trend?

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Special committees, by design, are created to address conflicts and to insulate the board of directors from liability for the very conflicts that may invite judicial scrutiny of the fairness of the board’s decision. A...more

Hogan Lovells

In re Pattern Energy Group Inc: risks to directors and officers in not maximizing stockholder value - Corporate / M&A Decisions...

Hogan Lovells on

In a 200+ page decision, the Court of Chancery in In re Pattern Energy Group Inc. Stockholders Litigation, (C.A. No. 2020-0357-MTZ (Del. Ch. May 6, 2021)) declined to dismiss putative shareholder class claims for breach of...more

Morris James LLP

Chancery Rules Failure to Disclose “Intrinsic Value” Precludes Corwin Defense – But Does Not Necessarily Suggest a Breach of the...

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In In re USG Corp. S’holder Litig., 2020 WL 5126671 (Del. Ch. Aug. 31, 2020), the Court of Chancery granted the director-defendants’ motions to dismiss post-closing money damages claims arising out of the sale of USG...more

BCLP

Delaware Court of Chancery Again Declines to Dismiss a Caremark Oversight Failure Claim

BCLP on

On April 27, 2020, the Delaware Court of Chancery for the third time in a year denied a motion to dismiss a Caremark claim. The case, Hughes v. Hu, involves a derivative claim against the audit committee and officers of a...more

Proskauer - Minding Your Business

Delaware Chancery Holds Early Committee Appointment Necessary to Cleanse Conflict from Corporate Transactions

In Salladay v. Lev, the Delaware Chancery Court elaborated on how early a corporate board must take protective measures to shield a conflicted transaction from entire fairness review. Salladay involved a motion to dismiss a...more

Skadden, Arps, Slate, Meagher & Flom LLP

Reevaluating the Board Risk Oversight Process: Implications of Marchand and Other Recent Developments | Insights | Skadden, Arps,...

On February 26, 2020, Skadden held a webinar titled “Reevaluating the Board Risk Oversight Process: Implications of Marchand and Other Recent Developments.” The panelists were Edward Micheletti, litigation partner and...more

Akin Gump Strauss Hauer & Feld LLP

Implications for Section 220 ‘Books and Records’ Demands Following High River Limited Partnership

In High River Ltd. P’ship v. Occidental Petroleum Corp., No. CV 2019-0403-JRS, 2019 WL 6040285 (Del. Ch. Nov. 14, 2019), the Court of Chancery of the state of Delaware recently refused to hold that Section 220 books and...more

McDermott Will & Emery

Court of Chancery Expands Stockholder Right to Corporate Books and Records

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In a recent post-trial opinion, Vice Chancellor Laster of the Delaware Court of Chancery issued an important decision regarding stockholder books and records demands under Section 220(b) of the Delaware General Corporation...more

A&O Shearman

M&A Watch: Seeking Your True Purpose? Delaware Offers Guidance on Section 220 Requests

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Following Corwin v. KKR Financial Holdings and other Delaware cases that have reinforced the standards that stockholder suits must meet to survive dismissal, would-be litigants have increasingly invoked Section 220 of the...more

Foley & Lardner LLP

INSIGHT: New Corporate Board Procedures Advisable to Satisfy Duty of Oversight

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In Marchand v. Barnhill, a unanimous Delaware Supreme Court imposed substantial new procedural expectations on corporate directors to satisfy their fiduciary duty of oversight related to material risk areas and legal...more

Perkins Coie

2019 Corporate Governance Hot Topics

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The following update highlights recent corporate governance hot topics and trends for directors of public companies. Board Oversight of Mission-Critical Risks - In June 2019, the Delaware Supreme Court allowed a Caremark...more

WilmerHale

Sounding the Bell for Proactive Risk Oversight

WilmerHale on

The Delaware Supreme Court recently sounded a warning bell for directors, reminding that as part of their duty of loyalty, they “must make a good faith effort to implement an oversight system and then monitor it.” The case...more

Sheppard Mullin Richter & Hampton LLP

Delaware Supreme Court Allows Caremark Claim to Proceed Against Directors of Ice Cream Manufacturer Following Listeria Outbreak

In Marchand v. Barnhill, No. 533, 2018, 2019 Del. LEXIS 310 (Del. June 18, 2019), the Delaware Supreme Court (Strine, C.J.) reversed a Delaware Court of Chancery (Slights, V.C.) order dismissing a derivative claim alleging...more

White and Williams LLP

Evidence of Lack of Adequate Compliance Systems Sufficient to Plead Bad Faith by Board

Summer is usually the best time of year for ice cream companies, but the season is off to a rough start for Blue Bell Creameries, USA, Inc. The Delaware Supreme Court, in Marchand v. Barnhill, held on June 18 that a suit...more

A&O Shearman

M&A Watch — Caremark Unfrozen: Delaware Supreme Court Revisits Oversight Claims

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The Delaware Supreme Court recently took the opportunity to revisit Caremark with its en banc decision in Marchand v. Barnhill, No. 533, 2018 (Del. June 19, 2019). In Marchand, the Court reversed the dismissal of a...more

Dechert LLP

Delaware Supreme Court Reverses Dismissal of Caremark Claim, Finding Lack of Board-Level Oversight and Director Independence

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In Marchand v. Barnhill et al. (“Blue Bell”),1 the Delaware Supreme Court on June 19 unanimously reversed the dismissal of a shareholder derivative lawsuit against the members of the board of directors and two officers of...more

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