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Court Of Chancery Upholds The Business Judgment Rule Again

Posted In Fiduciary Duty

In re The Goldman Sachs Group Inc. Shareholders Litigation,  C.A. 5215-VCG (October 12, 2011)

Every so often, a corporation acts so badly that a plaintiff decides to take a run at attacking the business judgment rule and sues the corporation's directors alleging their decisions have been too stupid to be protected by that rule of Delaware law.  That was true in the famous Disney case and this is another example of such a suit.  After all, who could stand up for Goldman Sachs these days?

Well, showing that the business judgment rule is alive and well, the newest member of the Court of Chancery in this decision reaffirms that hindsight alone does not support a good claim.  The decision is noteworthy because Vice Chancellor Glasscock exhibits the same care and scholarship as his predecessors in his opinion dismissing the complaint.



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