Michael B. Gonen of Duane Morris. Courtesy photo Key Takeaway
The Delaware Supreme Court in Diep v. Trimaran Pollo Partners, affirmed 4-1 the Delaware Court of Chancery's finding that a special litigation committee was acting independently and reasonably in seeking to dismiss a derivative claim. An SLC bears the burden of persuasively showing its own independence, good faith and reasonableness, in contrast to the demand excuse stage where the plaintiff must rebut those presumed qualities. Previous language speaking of an SLC needing to be "above reproach" were specific to the particular circumstances of single-member SLCs and do not set forth a higher standard for independence.Wither Pompeia: 'Diep v. Trimaran Pollo Partners'
Delaware Supreme Court affirms dismissal on SLC's motion, refusing to apply "Caesar's Wife" standard of "above reproach" to multi-member SLCs.
August 10, 2022 at 09:00 AM
8 minute read
Corporate Governance
Michael B. Gonen of Duane Morris. Courtesy photo
Key Takeaway
The Delaware Supreme Court in Diep v. Trimaran Pollo Partners, affirmed 4-1 the Delaware Court of Chancery's finding that a special litigation committee was acting independently and reasonably in seeking to dismiss a derivative claim. An SLC bears the burden of persuasively showing its own independence, good faith and reasonableness, in contrast to the demand excuse stage where the plaintiff must rebut those presumed qualities. Previous language speaking of an SLC needing to be "above reproach" were specific to the particular circumstances of single-member SLCs and do not set forth a higher standard for independence.
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