Board of directors—Breach of fiduciary duty litigation

Secured a victory on a motion to dismiss on behalf of a board of directors of a privately held company in a lawsuit brought by a secured creditor of the company for alleged fiduciary misconduct. The secured creditor, suing derivatively on the basis of the company’s insolvency, alleged the board violated its duty of loyalty by failing to accept certain purchase offers that would have repaid the debt owed to the secured creditor. The Delaware Court of Chancery dismissed the fiduciary duty claims at the motion to dismiss stage on grounds that the secured creditor had failed to make a litigation demand on the board and had failed to otherwise demonstrate that a litigation demand would have been futile because at least a majority of the board was materially interested or lacked independence as a matter of Delaware law.