Dirienzo v. Lichtenstein, C.A. No. 7094-VCP (Del. Ch. Sept. 30, 2013).
In this 91-page opinion the Court of Chancery addressed a myriad of claims including the following: derivative claims for breach of fiduciary duty in connection with a restructuring; direct claims against a special committee; and related breach of fiduciary claims in connection with the allegations that the minority shareholders suffered from an unfair transaction.
The defendants largely prevailed on their arguments that the derivative claims should be dismissed for failure to make a pre-suit demand on the board of the general partner of the limited partnership and that the pre-suit demands were not excused under either the Aronson or Rales tests.
Notable is the court’s discussion that in the context of a limited partnership, demand must be made on the board of the general partner of the limited partnership and not simply on the general partner itself.
The court also addressed the well-settled principles in connection with an analysis of the independence of a board member.
The court clarified that: (i) it is appropriate in connection with a motion to dismiss to address the exculpation provisions of Section 102(b)(7) or related indemnification provisions in applicable agreements–at the motion to dismiss stage; and (ii) even if a director may have the burden of proof when the entire fairness standard applies, that same reasoning does not apply to a special committee.