In the recent case of Marchand v. Barnhill, the Delaware Supreme Court reversed the dismissal of a claim that the directors of Blue Bell Creameries USA, Inc. had breached their duty of loyalty under Caremark and Stone through a lack of oversight, holding that the plaintiff had pled facts supporting a reasonable inference that the Blue Bell directors “consciously failed ‘to attempt to assure a reasonable information and reporting system existed.’” Under Delaware law, a director can be personally liable for breaches of the duty of loyalty. This Legal Update provides background on the case and identifies practical considerations for boards in its aftermath.

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