The Delaware Court of Chancery, in David Shabbouei v. Laurent Potdevin, et al. and Lululemon Athletica, Inc., C.A. No. 2018-0847-JRS, memo. op. (Del. Ch. Apr. 2, 2020), dismisses a stockholder derivative action challenging a board’s decision to allow a company’s CEO to resign and receive severance, rather than terminate him for cause following employee complaints of inappropriate conduct, for failure to plead demand, examining individual directors’ likelihood of liability under a duty of oversight theory despite plaintiff’s insistence that it did not plead a Caremark claim.
NEW: K&L Gates discusses the decision in Derivative Suit Dismissed For Failing to Plead Demand Futility.
Morris James discusses the decision in The Court of Chancery Dismisses Effort to Plead Around Rule 23 in CEO’s Attempt to Escape Alleged Oversight Failures.
Frank Reynolds discusses the decision in Chancery Court finds charges over lululemon board’s CEO exit pact too thin to pass pre-suit demand.
Wachtell discusses the decision in Delaware Court of Chancery Rejects Challenge to CEO Separation Agreement.
$$$ Law360 discusses the decision in Lululemon Escapes Investor’s Toxic Work Culture Claims.