Delaware Chancery Court Renders Important Decision On SLC Investigations

On Monday, May 5, the Delaware Chancery Court rendered an important decision clarifying the “good faith” requirement that applies to determinations made by Special Litigation Committees. Vice Chancellor Lamb concluded on the basis of numerous failings in the investigation and report of a one-member SLC that the “good faith” standard was not met, and denied the SLC’s motion to dismiss. Corporations considering a SLC investigation, SLC members and their counsel should give serious consideration to the issues raised by this decision.