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Abstract: 

The authors discuss two evolving areas of Delaware law for which they review recent significant decisions, offer predictions for future litigation, and summarize suggested best practices. They first address Caremark oversight claims, which, despite their proliferation following, the Delaware Supreme Court’s 2019 decision in Marchand v. Barnhill, remain one of the most difficult claims to plead and prove given the requirement that plaintiffs demonstrate bad faith. Second, they address the recent jurisprudence surrounding controlling stockholders, including entire fairness review and conflict transactions, duties of controlling stockholders, controller status, and reincorporation with a controller. Oversight and controlling stockholder risks are at the forefront of Delaware M&A and fiduciary duty litigation and should be key areas of focus for directors, officers, and stockholders alike.

Keywords: Caremark Doctrine Oversight Claims; Lebanon County Employees’ Retirement Fund v. Collis; Conflict Transactions

Affiliations:  1: Freshfields Bruckhaus Deringer US LLP; 2: Freshfields.