The Court of Chancery exercised its discretion to appoint a guardian ad litem to assist the court in determining the appropriate amount to reserve as security for unknown liabilities in connection with dissolving a corporation pursuant to the optional court-supervised procedure contemplated by DGCL Sections 280 and 281(a). In the matter styled In Re Riviera Resources, Inc., C.A. No. 2022-0862-JTL (Del. Ch. March 20, 2023), the Court observed that there is not much guidance in the case law on the appointment of a guardian in this context–which makes this an important decision on many levels for those involved in corporate litigation in Delaware and equity practitioners generally.

There is much to commend this opinion and it deserves more extensive commentary than I have time to provide. Suffice it to emphasize for this short blog post that the decision is required reading for anyone who needs to know the latest iteration of Delaware law on the covered topic.

But I want to mention one point in closing. The opinion is characteristically buttressed by scholarship and refers to the latest book from Professor Stephen Bainbridge, one of the nation’s most prolific corporate law scholars, in the context of reciting a few bedrock principles of Delaware corporate law:

Directors owe duties to the corporation for the ultimate benefit of its stockholders as residual claimants. In re Trados Inc. S’holder Litig., 73 A.3d 17, 40–41 (Del. Ch. 2013). The pull of fiduciary obligation thus calls on directors to favor the common stockholders. See Frederick Hsu Living Tr. v. ODN Hldg. Corp., 2017 WL 1437308, at *17–20 (Del. Ch. Apr. 14, 2017). And directors have a natural affinity for stockholders, because that is the constituency who elects them. See Stephen M. Bainbridge, The Profit Motive: Defending Shareholder Value Maximization 73–74 (2023).

Slip op. at 18.