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Brian M. Lutz and Mark H. Mixon Jr. of Gibson, Dunn & Cructcher. Courtesy photo

Longstanding Delaware law not only entitles but encourages directors to rely in good faith on corporate officers and expert advisers for advice, information, and specialized expertise. Pursuant to Section 141(e) of the Delaware General Corporation Law, a member of a board of directors is “fully protected” from personal liability for duty of care violations “in relying in good faith upon … any other person as to matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the corporation.” The Delaware Court of Chancery recently continued this long line of Delaware authority in The Cirillo Family Trust v. Moezinia, in which the court dismissed breach of fiduciary duty claims against directors who had relied on legal advice, even when that legal advice was later challenged in litigation.

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