fiduciary duties to the firm by selecting and pursuing with fidelity and prudence a plausible strategy to maximize the firm’s value. 85
If the common law is to evolve in a direction where judges invent quasi-fraudulent
conveyance actions to be brought by subsidiaries against the independent directors of
public companies, it should do so in more compelling circumstances than these. The
Litigation Trust’s complaint pleads no rational reason why the independent board
majority stood to benefit personally from undertaking a foolish business strategy.
Nothing in the reorganization helped them enrich themselves. Even assuming the odd
notion that the Trenwick board sought to benefit Trenwick by sacrificing its entire U.S.
operations to bankruptcy, the beneficiary of that strategy would have been Trenwick
itself and the law of fraudulent conveyance permitted creditors to seek relief against
For all these reasons, I conclude, among other things, that: (1) the Litigation Trust
has no standing to sue the directors of Trenwick; (2) even assuming the Litigation Trust
could sue the directors of its parent, rather than the parent itself, the Litigation Trust has
not stated a claim that the Trenwick directors breached any fiduciary duty owed to
Trenwick; and (3) the Litigation Trust has failed to plead facts supporting an inference
that Trenwick or Trenwick America were insolvent at any of the relevant times, and
therefore has not pled fact supporting an inference that Trenwick owed any fiduciary
duties to Trenwick America at the time of the challenged transactions.
As to this, see
, 863 A.2d 772, 790 (Del. Ch. 2004).