Alert: Delaware Court Affirms Protection of Business Judgment Rule in Current Financial Crisis

The Delaware Court of Chancery recently dismissed multiple counts alleging directors of Citigroup breached their fiduciary duties by failing to properly monitor the company’s exposure to the subprime mortgage crisis (In re Citigroup Inc. Shareholder Derivative Litigation, Civ. Action 3338-CC (Del. Ch. Feb. 24, 2009)). In dismissing the claims, Chancellor Chandler reaffirmed Delaware law relating to the business judgment rule and clarified the application of the rule in the context of directors’ duty of oversight of business risks.

Read the full alert here.

If you have questions regarding this alert, please contact—

• Gemma L. Descoteaux, 214.969.4783, Dallas
• Russell W. Parks Jr., 202.887.4092, Washington, D.C.
• C.N. Franklin Reddick III, 310.728.3204, Los Angeles
• Adam K. Weinstein, 212.872.8112, New York