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C. The Litigation Trust Also Fails To State A Claim Against Trenwick America’s Former Directors

The Litigation Trust also pleads a breach of fiduciary duty claim against the

directors of Trenwick America. This claim stands, in one respect, on firmer ground.

That is because as directors of Trenwick America, these defendants would be, in the

language of many of our cases,87 described as owing fiduciary duties to Trenwick

America as an entity.

But even the straightforward notion that the Trenwick America directors owed the

company fiduciary duties must not be viewed as a simple one. The context is what

matters.88 To the extent that Trenwick America was a wholly-owned solvent subsidiary

of Trenwick, the fiduciary duties owed by the Trenwick America board ran to Trenwick.

Our Supreme Court has made clear that, “in a parent and wholly-owned subsidiary

context, directors of the subsidiary are obligated only to manage the affairs of the

subsidiary in the best interests of the parent and its shareholders.”89 Likewise, this court,



, 722 A.2d 5, 10 (Del. 1998) (“The directors of Delaware corporations

stand in a fiduciary relationship not only to the stockholders but also to the corporations upon

w h o s e b o a r d s t h e y s e r v e . ) ( c i t i n g


5 A . 2 d 5 0 3 , 5 1 0 ( D e l . 1 9 3 9 ) ) ;


1991 WL 277613 at 34 & 34 n.55;

., 678 A.2d 533, 539

(Del. 1996) (“It is well established that the directors of a Delaware corporation have a fiduciary

88 relationship with the corporation they serve . . . .”). Professor Bainbridge’s thoughts on this subject, touched on at

note 75, have obvious

relevance here. As he points out, simply saying that a director owes duties to the firm does little to define what those duties are and the end to which they are directed.


, 717, 720 (Del. 1971)).

, 545 A.2d at 1174 (citing

, 280 A.2d


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