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Abstract: 

In two recent cases the Delaware courts have allowed Caremark claims to proceed, raising the question whether the courts are lowering the high pleading bar to such cases. The authors discuss the cases, finding that extreme facts rather than lowering requirements are responsible for the decisions. Their takeaways include three central points that bear on whether a Caremark claim will survive a motion to dismiss; and they conclude that corporate boards should identify “mission critical” compliance risks and have─and use─mechanisms for monitoring those risks.

Keywords: Marchand v. Barnhill; In re Clovis Oncology, Inc. Derivative Litig; Pleading a Caremark Claim

Affiliations:  1: Debevoise & Plimpton LLP; 2: Debevoise; 3: Debevoise.