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Michael Furey authored an article, "Del. Caremark Opinion Shows Shift In Deference To Boards," published by Law360. Furey discusses the recent Delaware Supreme Court's decision in Marchand v. Barnhill, after a third Delaware Chancery Court judge refused to dismiss a derivative action asserting a Caremark oversight claim against corporate directors. Previously, motions to dismiss Caremark claims were granted on a routine basis, but in three recent decisions the Delaware Chancery court did not dismiss the claims. This has generated interest over whether Marchand represents a change in the law, a change in judicial attitude or another example of bad facts making bad law. Furey believes these recent decisions have not fundamentally changed the law but represent a new willingness on the part of courts to review claims that boards of directors have failed to monitor management in a less deferential manner to directors than in the past. These decisions are part of a trend towards the use of compliance programs, including Board committees, as a way to prevent corporate wrongdoing.
You can read the full article here (subscription).
