Delaware Corporate and Commercial Litigation Blog : Delaware Litigation Lawyer & Attorney : Francis G. X. Pileggi : Corporate, Business, Commercial, Delaware Chancery Court

It seems that I finally have a good faith basis to pen a law-related post relevant to this blog that warrants the use of a photo of His Holiness Pope Benedict XVI.

As reported recently by the ClassActionBlawg.com here, apparently descendants of The Knights Templar have sued the Supreme Pontiff about alleged confiscation of property that was owned by the secretive group over 700 years ago. Yes, there may be a statute of limitations problem, and as head of state for the sovereign nation referred to as The Holy See and known affectionately as The Vatican, there is also an issue of sovereign immunity. ( Delaware litigation and class actions go together like ham and eggs, so that was my hook.)
 

As a member of the Knights of Malta, which traces its history, according to some accounts, approximately back to the year 1085,  I have an interest in these things and I have finally found a litigation-based reason to post about it on this blog.

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Courtesy of Professor Bainbridge is a link to an article by Professor Bob Thompson on the seminal  Delaware Supreme Court decision in Sinclair Oil v. Levien, from 1971, that addressed key issues of fiduciary duty and judicial review standards. Here is an excerpt from a quote that Professor B. included in his post about the article.

Sinclair provides room for “selfish” ownership for a majority shareholder, so long as the minority shareholders receive a proportional benefit, a standard that at the time seemed to expand the discretion for majority shareholders. Viewed from a point decades later, this part of Sinclair has not proved to be a template for broader applications and other doctrines have developed to constrain the actions of majority shareholders.

Keywords: director action, judicial review of corporate action, business judgment rule, intrinsic fairness, enhanced scrutiny, controlling shareholders, fiduciary duty

UPDATE: Here is an insightful analysis by Professor Larry Ribstein of the Sinclair case highlighted in Professor  Thompson's article. A quote  from Professor R's extensive discussion of the "contract aspect of the case"  follows:

Once you’re outside of fiduciary land, as you are in Sinclair, parties in a commercial relationship can act selfishly to each other, governed by their contracts. Sometimes the contract is implied and not obvious. But the court should look hard for these contractual guideposts. The fog of fiduciary language often obscures the search. This is the basic lesson of Sinclair

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