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Delaware Decisions Reduce Hurdles to Defending D&O Claims by Anjali C. Das
Wilson Elser Moskowitz Edelman & Dicker LLP
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September 28, 2009
Previously published on September 2009
A typical claim targeting directors and officers ("D&Os") in the context of a merger or acquisition is that the D&Os breached their fiduciary duties of care and loyalty by failing to get the best deal for shareholders. However, in a boon to D&Os and their insurers, several recent Delaware court decisions have made it easier for defendants to successfully defend these types of claims. Earlier this year, the Delaware Supreme Court set a high threshold for breach of duty of loyalty claims, which must be premised on a "knowing and complete" failure of a director's responsibilities. Subsequent Delaware cases have applied this exacting standard in dismissing breach of loyalty claims against directors.
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The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance. |
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