The recent decision by Vice Chancellor Donald F. Parsons Jr. in OptimisCorp v. Waite, C.A. No. 8773-VCP (Del. Ch. Aug. 26, 2015), appeal pending, garnered much attention for his finding that the plaintiffs’ conduct was “prejudicial to the administration of justice” and had undermined the integrity of the proceedings. This led him to dismiss one claim against the defendants and to draw certain adverse inferences against the plaintiffs in connection with certain of their other claims as a sanction for their misconduct. However, the case is also noteworthy for some of the substantive holdings relating to breach of fiduciary duty claims. Specifically, Parsons cast doubt that a conspiracy among fiduciaries is a legally cognizable cause of action; rejected the claim that a director’s disagreement with the company’s strategic vision without telling the rest of the board amounts to actionable disloyalty; and rejected the claim that directors breached their duty of loyalty when they failed to provide advance notice to a CEO with board-appointment rights under a stockholders agreement of their intent to remove him so that he could first exercise those rights.
The facts of the case were extensively discussed by Parsons in this 213-page, post-trial opinion. In brief, the board of the plaintiff corporation voted to terminate the plaintiff CEO for alleged misconduct. The board also voted to amend a stockholders agreement to remove a provision that granted the initial stockholders, controlled by the CEO, the right to appoint a majority of the board. The CEO eventually prevailed in having his removal and the amendment to the stockholders agreement vacated in a Section 225 action. The CEO and the company then sued the directors who had sought his removal and the company’s former chief financial officer, alleging that they had engaged in a conspiracy that, in Parsons’ words, “involved, essentially, everyone who disagreed with the CEO’s management of the company,” and asserting breach of fiduciary duty claims and other claims against them.
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