Communications S’holders Litig., 2004 WL 1305745, at *39 n.184 (Del. Ch.)
(employing the “and/or” phraseology “because the Delaware Supreme Court has
yet to articulate the precise differentiation between the duties of loyalty and of
good faith.”). That is little comfort, however, for disinterested and independent
directors hoping to be dismissed from claims alleging a failure to act in good faith
prior to trial.
In Official Committee of Unsecured Creditors of Integrated Health Servs., Inc. v.
Elkins, 2004 WL 1949290 (Del. Ch.), the Court of Chancery found that a majority
of the Board of Directors who approved certain challenged transactions were
disinterested and independent but that Plaintiffs’ claim that the Board
“consciously and intentionally disregarded its responsibilities” was sufficient to
survive a motion to dismiss for failure to state a claim. Id. at *10.
Vice Chancellor Noble’s commentary was enlightening as to the way the
Court might view good faith claims on a motion to dismiss. The Court
noted that “one may alternatively conceptualize the holding in [Disney III]
as a duty of care claim that is so egregious . . . that it falls within [the good
faith] exception to the general exculpating power of § 102(b)(7)” and
stated that the pleading requirement was a “high bar” but that the facts
plead were sufficient to meet that bar on a motion to dismiss. Id. at *9
n.37 and *12.