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To this point, I also do not believe that Trenwick America is permitted to do an

end-run around Trenwick’s exculpatory charter provision. A judicial acknowledgement

that, as a matter of the common law of equity, directors of a public company protected by

an exculpatory charter provision may be exposed to negligence-based liability claims

made by the public company’s wholly-owned subsidiaries would undercut the important

public policy reflected in 8

§ 102(b)(7). Out of nowhere independent directors of

parent corporations would face, in a litigation context in which firm failure is a given,

due care claims by entities to which our law has said the parent itself does not owe any

fiduciary duties. To sanction such bizarre claims would discourage board service and

create uncertainty about the extent to which parent corporations could deploy their

organization’s assets in a good faith effort to undertake risky strategies that promise

future profit. Put simply, even if one were to conclude (as I do not) that Trenwick

America can proceed against the Trenwick directors directly, at the very least Trenwick

America would have to plead a claim not exculpated by the Trenwick charter. It has

failed to do so.

Of course, I must deal with the Litigation Trust’s assertion that Trenwick America

may complain about the conduct of the Trenwick directors because Trenwick and

Trenwick America were “insolvent” at all relevant times. The most immediate response

is the easiest: the mere incantation of the word insolvency does not open the key to


If a plaintiff seeks to state a claim premised on the notion that a corporation was

insolvent and that the directors of the corporation were therefore obligated to consider the


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