Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Jason J. Mendro and Jeffrey S. Rosenberg of Gibson Dunn & Crutcher.

It is an all-too familiar accusation to many directors: If only you had done something more, the corporation could have avoided an injury or loss. Since the mid-1990s, Delaware courts have repeatedly recognized that attempting to pin personal liability on directors for their alleged inaction is “possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment,” as in In re Caremark International Derivative Litigation, 698 A.2d 959, 967 (Del. Ch. 1996). Yet the playbook of many plaintiffs has not changed; when corporations experience trauma, plaintiffs take aim at their directors and officers, reflexively claiming that they are liable for failing to predict and prevent corporate losses. These claims are variously referred to as “failure-to-monitor,” “oversight liability,” or “Caremark” claims, and Delaware courts have looked on them with healthy skepticism. In 2017, two cases illustrated that Delaware courts continue to impose exacting pleading burdens on Caremark claims, especially when plaintiffs claim that they are excused from making a demand on the board before suing derivatively.

This premium content is locked for
Delaware Business Court Insider subscribers only.

  • Subscribe now to enjoy unlimited access to Delaware Business Court Insider content,
  • 5 free articles* across the ALM Network every 30 days,
  • Exclusive access to other free ALM publications
  • And exclusive discounts on ALM events and publications.

*May exclude premium content
Already have an account?
Interested in customizing your subscription with Law.com All Access?
Contact our Sales Professionals at 1-855-808-4530 or send an email to groupsales@alm.com to learn more.

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2018 ALM Media Properties, LLC. All Rights Reserved.