By Jason Jowers
In Louisiana Municipal Police Employees’ Retirement System v. Pyott, 46 A.3d 313 (Del. Ch. 2012), the Delaware Court of Chancery issued a controversial decision that attempted to remedy the problem of multiple plaintiffs’ firms rushing to file actions in multiple jurisdictions, without first investigating the claims, immediately following the announcement of a corporate trauma by a Delaware corporation. The Court of Chancery attempted to create a Delaware-centric solution pursuant to which plaintiffs would have to investigate claims through books and records inspection actions filed in Delaware before filing so-called Caremark claims for directors’ breach of oversight responsibility. On April 4, 2013, in Pyott v. Louisiana Municipal Police Employees’ Retirement System, __ A.3d __, 2013 WL 1364695 (Del. 2013), the Delaware Supreme Court reversed. As discussed in my article, however, the Delaware Supreme Court’s opinion raises as many questions as it answers, and continues the debate on how to remedy the problem of fast-filing plaintiffs.
First published in Business Law Today, May 2013. Link to article.
Reprinted with permission.