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C.

3.

The Court characterized the claim as a “Caremark” claim, in reference to

In re Caremark Int’l Inc. Deriv. Litig., 698 A.2d 959 (Del. Ch. 1996), and

held that the nonparticularized assertions that the directors failed to

prevent accounting irregularities “did not come close” to pleading a

Caremark claim. Importantly, the Court held that the Caremark opinion

“articulates a standard for liability for failures of oversight that requires a

showing that the directors breached their duty of loyalty by failing to

attend to their duties in good faith. Put another way, the decision premises

liability on a showing that the directors were conscious of the fact that

they were not doing their jobs.” Guttman, 823 A.2d at 506.

4.

In an intriguing footnote, Vice Chancellor Strine probed the relationship

between the duty of loyalty and good faith:

A

director

cannot

act

loyally

towards

the

corporation unless she acts in the good faith belief that her actions are in the corporation’s best interest. . . . It does no service to our law’s clarity to continue to separate the duty of loyalty from its own essence; nor does the recognition that good faith is essential to loyalty demean or subordinate that essential requirement. There might be situations when a director acts in subjective good faith and is yet not loyal (e.g., if the director is interested in a transaction subject to the entire fairness standard and cannot prove financial fairness), but there is no case in which a director can act in subjective bad faith towards the corporation and act loyally.

The reason for the disloyalty irrelevant, the underlying motive

(the (be

faithlessness) is it venal, familial,

collegial, or nihilistic) for conscious action corporation’s best interest does not make it opposed to faithless. . . .

not in the faithful, as

Id. at 506, n.34.

It may be a rare case, indeed, where the Court finds directors to be unexculpated

on the basis of a failure to act in good faith without finding a breach of the duty of

15

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