long-term viability of Trenwick’s U.S. operations, particularly since each of the Trenwick
America directors is alleged to have been domiciled in Connecticut and functioning as an
officer of Trenwick America — i.e., they are alleged to have been the key managers of
Trenwick’s domestic U.S. operations.
Not only that, the complaint is entirely devoid of pled facts regarding what the
Trenwick America board did that was either a breach of the duty of care or the duty of
loyalty. In the former respect, I take it as no novelty for me to hold that the Trenwick
America board had no duty to replicate the deliberative process of its sole stockholder’s
board of directors. In the absence of any indication that they would be causing Trenwick
America to violate legal obligations owed to others, the Trenwick America board was
free to take action in aid of its parent’s business strategy.92 There is no sound basis to
hold that the boards of wholly-owned subsidiaries must engage in their own parallel
merger consideration processes, thereby setting in motion an inefficient intergenerational
machine spreading the powerful procedural mandate of
progeny to every level of the corporate family.93 Delaware law does not embrace the
concept that a director of a wholly-owned subsidiary owes a duty to second-guess the
business judgment of its parent corporation when following and supporting the parent’s
strategy would not violate any legal obligation the subsidiary owes to another.
., 2000 WL 286722, at *11 (“A wholly-owned
subsidiary is to be managed solely so as to benefit its corporate parent”) (citing A.2d at 1174).
, 488 A.2d 858 (Del. 1985).