The Delaware Court of Chancery in Juan C. Rojas v. Marvin R. Ellison, et al. and J.C. Penney Company, Inc., C.A. No. 2018-0755-AGB, memo. op. (Del. Ch. July 29, 2019), found that a company’s settlement of consumer litigation did not constituted a “red flag” that put directors on notice of potential future statutory noncompliance and raised a threat of liability under Caremark.

K&L Gates discusses the decision in Failure to Make Demand on Board Prior to Commencing Derivative Action not Excused When Plaintiff Did Not Demonstrate That Demand Would Have Been Futile Because Directors Acted in Bad Faith by Knowingly Breaching Oversight Responsibilities.