holding company. As a result, neither Trenwick nor its stockholders could bring an
action against its directors for damages resulting from a breach of duty of care.
Here, I do not believe that the complaint even pleads facts supporting a gross
negligence claim. It is undisputed that the Trenwick board was dominated by
independent directors. The complaint pleads no facts indicating that they had a motive to
injure Trenwick. Even as to the one management director, defendant James Billett, the
complaint alleges no facts suggesting a motive on his part to injure Trenwick’s long-term
value. Indeed, the complaint indicates that Billett rolled his existing options into options
in the entity resulting after the LaSalle merger.
Moreover, both the Chartwell and LaSalle mergers involved stock-for-stock
mergers between Trenwick and independent public entities. These were not self-dealing
mergers and they received support from Trenwick’s diverse base of shareholders.
Whether or not the mergers turned out well, there is nothing in the complaint that
supports the notion that the idea of putting these businesses together in order to achieve
economies of scale and a larger market share was irrational. Under our law, a complaint
does not state a claim simply by alleging in a cursory manner that independent directors
pursued “an all consuming and foolhardy acquisition strategy.”67
As Chancellor Allen
[T]o allege that a corporation has suffered a loss as a result of a lawful transaction, within the corporation’s powers, authorized by a corporate fiduciary acting in good faith pursuit of corporate purposes, does not state a
Compl. ¶ 35.