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The article discusses a court case in which a Caremark claim against a corporation's former president was dismissed by the Delaware Court of Chancery. The court ruled that the plaintiff's complaint did not sufficiently demonstrate that the defendant acted in bad faith or that any potential wrongdoing occurred. The company accused the defendant of breaching her fiduciary duties by ignoring customer issues and failing to address them with the board. However, the court determined that these allegations did not constitute "red flags" that could give rise to Caremark liability. The court emphasized that the Caremark doctrine is intended to address extraordinary cases of fiduciaries' failure to implement an effective compliance system or conscious disregard of the law, rather than everyday business problems. [Extracted from the article]

The Court assumed, without holding, that Musk was Tesla's controlling stockholder, and acknowledged Musk was more involved in the deal process than he should have been. Later in March 2016, after Musk again raised the idea of a possible merger, the Board declined to move forward with SolarCity, and also determined that Musk must recuse himself from any vote related to a potential transaction with SolarCity. [Extracted from the article]

In this memorandum opinion, the Court of Chancery denied a motion to dismiss claims for breach of fiduciary duty and unjust enrichment arising from the sale of Authentix Acquisition Company, Inc. ("Authentix"). Regarding the remaining director defendant, who was also the company's CEO, the Court relied on long-standing Delaware precedent to find that senior corporate officers generally lack independence in connection with matters involving the interests of a controlling stockholder. The Court also denied the motion to dismiss plaintiffs' unjust enrichment claims against Carlyle and Authentix's CEO. [Extracted from the article]

In In re Oracle Corporation Derivative Litigation, 2021 WL 2530961 (Del. Ch. June 21, 2021), the Court of Chancery considered allegations that Lawrence Ellison, Oracle Corporation's founder and 37.8% stockholder, used his control of Oracle to force an acquisition of NetSuite, Inc., another Ellison-founded company in which he and his affiliates held a 44.8% stake. Next, the Court found officer-director Jeffrey Henley acted as a director when attending a board meeting where the potential acquisition was discussed and when working to "crush" competition from NetSuite. [Extracted from the article]

Even if a transaction satisfies the entire fairness standard-the most rigorous standard of review under Delaware corporate law-it may still be invalidated if undertaken for the inequitable purpose of thwarting a stockholder's voting rights, as the Supreme Court of Delaware recently held in Coster v. UIP Companies, Inc., 2021 WL 2644094 (Del. June 28, 2021). Marion Coster and Steven Schwat each owned 50% of UIP Companies, Inc., whose three directors included Schwat and Peter Bonnell. [Extracted from the article]