ANALYSIS: Chancery Gets Curveball in Novel Caremark Trial

After more than a decade of litigation, the first, long-awaited Caremark trial concluded last week in the Delaware Court of Chancery. Considering the high bar that exists for pleading the claims at issue, a favorable outcome for corporate directors accused of breaches of fiduciary oversight duties is highly probable. And yet, multiple days of testimony by current and former directors of Blue Bell Creameries raised the court’s eyebrows with respect to the company’s system, or lack thereof, for reporting and monitoring red flags.

For the moment, proving bad faith among directors remains seemingly insurmountable. But as the canary in the ...