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Court Of Chancery Explains When Continuing Wrong Theory Applies

Posted In Fiduciary Duty

Buerger v. Appel, C.A. 6539-VCL (March 15, 2012)

After a board makes a decision that has consequences that last for years, the question arises of when the time to litigate over that decision expires.  Some decisions hold that when the decision is not reviewable later, such as when a long term contract is awarded, the time to attack that contract starts to run out the day the contract is approved.  Here, however, the Court noted that the company had the right to cancel the contract every year.  Thus, the Court held that each time the board decided not to cancel the contract, it made a new business decision that was subject to court attack from the date the contract was not cancelled.



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