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Delaware Supreme Court Validates Exclusive Federal-Forum Provisions for Federal Securities Claims

On Wednesday, the Delaware Supreme Court held in Salzberg, et al. v. Sciabacucchi (C.A. No. 2017-0931) that exclusive federal-forum provisions, which require shareholder claims under the federal Securities Act of 1933 (1933 Act or Securities Act) only be filed in federal court, are valid under Delaware law. As a result of the United States Supreme Court’s 2018 ruling in Cyan, Inc.
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Delaware Chancery Court Declines to Dismiss Caremark Claim Against Directors for Insufficient Monitoring of Experimental Drug

On October 1, 2019, in In re Clovis Oncology Inc. Derivative Litig., a Delaware Chancery Court denied a motion to dismiss the plaintiffs’ Caremark claim alleging that individual directors should be held financially liable for failing to monitor the development of the biotech firm’s only promising experimental drug and for allowing the firm to publish inflated performance results.
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Delaware Supreme Court on Director Risk Oversight and Independence

Key Holding and Facts. In Marchand vs. Barnhill, Chief Justice Leo E. Strine, Jr. writing on behalf of the Delaware Supreme Court earlier this month reversed the Court of Chancery’s 2018 dismissal of a stockholder derivative suit alleging Caremark claims.  Caremark claims are essentially claims asserting bad faith by board members such that the directors breached their duty of loyalty.
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