Chancery: Demand Futility Not Shown in Context of Caremark Claims

A recent decision of the Delaware Court of Chancery provides a scholarly and practical explanation of the onerous prerequisites that must be satisfied before a Caremark claim will meet the rigors of the demand futility analysis in order to justify the absence of pre-suit demand on the board. The 82-page decision in Oklahoma Firefighters Pension & Retirement System v. Corbat, C.A. No. 12151-VCG (Dec. 18, 2017), deserves to be read in its entire glory for an understanding of the important factual nuances, but for purposes of this short blog post I will highlight several of the most important legal principles with the widest applicability. Background Facts: This lengthy opinion describes in great detail the important and extensive facts that are a necessary part of the reasoning and conclusion of the court.  The court praised the plaintiffs for using Section 220 and producing “a ponderous omnibus of a complaint.” But, unfortunately for the…

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