The Delaware Court of Chancery has denied Quadrant Structured Products Co. Ltd.’s motion for reargument in an effort to reinstate claims that Athilon Capital Corp. breached its fiduciary duties by investing in risky securities to benefit its controller, EBF & Associates. Vice Chancellor J. Travis Laster, who dismissed the claims earlier this month, ruled a board’s decision to invest in potentially risky assets is still protected by the business judgment rule.
“Quadrant’s complaint did not identify a basis for rebutting the presumptions of the business judgment rule,” Laster said in Quadrant Structured Products v. Vertin. “When evaluated under the business judgment rule, the allegations of the complaint did not raise a reasonably conceivable inference that the board’s decision to take on additional risk was so extreme as to be irrational and suggestive of bad faith.”
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