A recent decision from the Delaware Court of Chancery should be in the toolbox of all corporate and commercial litigators. In Guilbeau v. Footprint International Holdco, Inc., C.A. No. 2024-0968-JTL (Del. Ch. April 30, 2026), the court provided a scholarly analysis of the doctrinal and public policy issues surrounding the fiduciary duties of a director who is appointed by, for example, an institutional stockholder, a creditor, holders of a class of stock, or pursuant to contractual rights.

Additional benefits of this opinion include a deep dive into the nuances of the implied covenant of good faith and fair dealing, as well as a recitation of the elements of a claim for familiar staples of commercial litigation: promissory estoppel and tortious interference with contract.

This 59-page gem deserves careful reading but for purposes of this blog post, I highlight only a few key sections of the decision that should entice careful lawyers to read the whole thing.

Factual Context

This case involved claims by Class A preferred stockholders who challenged a cram-down financing based on allegations of breach of contract and related claims.

Highlights

• The court begins its analysis with a restatement of the requirements to successfully sue for breach of the implied covenant of good faith and fair dealing, a duty imposed on all contracts in Delaware, for example as a “gap-filler.” Slip op. at 20.
• In connection with its analysis of the implied covenant claims, the court regales the reader with some perspectives from English law on the nuances of this claim. See pages 30-31, 38, 42 and 51.
• As part of its thorough discussion of the fiduciary duties owed by directors who are appointed by specific stockholders—variously referred to as blockholder directors, representative directors, designated directors, or constituency directors—the court answered the question of: to whom are their duties owed. The answer is:

the stockholders in the aggregate in their capacity as residual claimants, which means the undifferentiated equity as a collective, without regard to any special rights. Directors thus owe fiduciary duties to the entity and the entire body of stockholders generally, rather than to individual stockholders or stockholder subgroups.

Slip op. at 33 (footnotes omitted). See also Slip op. at 31-34.

• The court explained that allowing a different result would lead to the untenable conflict of the director serving two masters. Id. at 35. The court also discusses the relevant analysis in part of the 1985 Delaware Supreme Court Van Gorkom decision, which was not overruled in relevant part on this issue by the Delaware Supreme Court decision in Gantler v. Stephens in 2009. See footnote 91.
• The court observed that “Delaware law does not generally recognize constituency directors”. Slip op. at 32.
• The court also provides a useful analysis of the options of fiduciaries to cause an efficient breach of a contract in order to fulfill their fiduciary duties. See footnotes 95 and 122.
• The court conducts an extensive review of the caselaw addressing the “discretionary-exercise” version of the implied covenant. It applied the elements of that version of the implied covenant to the facts of this case to reject those claims in this matter. See Slip op. at 43-45.

• The elements of a claim for tortious interference with contract are useful to recall. Slip op. at 54-55.

• The court discusses the elements of a promissory estoppel claim and the doctrinal underpinning as well as subtleties that support a successful argument based on this theory. Slip op. at 56-59.