Davey and Zack are now 6 1/2 months, and finally consistently sleeping through the night!  The temperature in Chicago has also finally hit 60 degrees in Chicago, for only the seventh time this year. Put ’em together, add another great post from my good friend Francis X. Pileggi, the Lou Gehrig of legal blogging, and–without making any vows–it’s time to dust off the blog and awaken from my blogging hibernation.  Thanks to those who’ve reached out to me in the interim with their kind words, comments, suggestions, and encouragement.

Here’s a link to Francis’s recent post on his Delaware Corporate and Commercial Litigation Blog about a decision handed down by one of the country’s preeminent bankruptcy judges, Judge Peter J. Walsh, in Miller v. McDonald (In re World Health Alternatives, Inc.), 2008 WL 1002035 (Bankr. D. Del. 4/9/08) (pdf). In this decision, Judge Walsh refused to dismiss this complaint filed by Francis and his colleagues against Brian Licastro, the former vice-president of operations and in-house general counsel of World Health Alternatives.  The opinion is a must read because–

• it explicitly extends the so-called Caremark duties to officers of a corporation, and in particular here, to the VP-operations and in-house general counsel, who was alleged "responsible for failing to implement any internal monitoring system and/or failing to utilize such system as is required by Caremark and Araneta"; (Op. at 26.)  

• it sustains, by a narrow margin, a corporate waste count against the VP/GC, despite his not having personally benefited from the alleged waste, based on the allegation that he was "aware of the alleged corporate waste and took no action, as fiduciaries, to prevent such conduct";  (Op. at 33.)

• it upholds a negligent misrepresentation count against the VP/GC alleging that "if [he] properly performed his duty as in-house counsel, these misrepresentation[s] [in public filings] would not have been made and the resulting harm [resulting in a $2.7 million payout in a shareholder class action] would have been avoided.  (Op. at 36-37.)

On January 14, 2007, I linked to various 27 bankruptcy-related cases discussed on Francis’s blog.  Time for an update linking to the next 27 bankruptcy-related posts by Francis since then:

• Court Imposes Caremark Fiduciary Duty on Corporate Officer (as compared to Director)

• Fiduciary Duty Claims against Subprime Lender in Bankruptcy

• Delaware Fiduciary Duties and the Bear Stearns Imbroglio

• Chancery Court at the Casinos: Issue of Indenture Default Addressed

• Bankruptcy Court Flubs Limited Partnership Decision

• Chancery Refuses to Defer to Bankruptcy Stay in Ordering Shareholder Meeting

• Chancery Declines to Stay Post-Foreclosure Eviction

• Del. Bankr. Court: Fiduciary Duty Claim Survives Even If Duplicative of Contract Claim

• Supreme Court Affirms Chancery Decision Rejecting Claims for Deepening Insolvency

• Advancement Claim Survives in Bankruptcy Court

• Timely Filing in Wrong Venue Not Defeated by Transfer

• D & O Coverage Triggered by "Loss"

• Creditor’s Claims Dismissed as Derivative

• Chancery Court Defers to Bankruptcy Court for Clarification Prior to Addressing Corporate Issues

• Settlement of D and O Claims With Policy Proceeds Not Stayed by Corporate Bankruptcy Issues

• Hedge Fund-Shareholder Loses Bid To Have Directors Elected After DGCL Section 225

• Directors’ Duties in Bankruptcy and Limits on Creditors’ Ability to Sue Directors Proceeding

• Deepening Insolvency Addressed by Federal Court in Delaware

• Daubert Hearing Required Before Deciding Motion to Exclude Expert Testimony

• Duties of Directors of Insolvent Delaware Corporations

• Delaware Supreme Court Rules: Creditors Have No Direct Claims Against Directors Of Corporation in Zone of Insolvency

• Chancery Court Stays Case in Favor of Bankruptcy Matter

• Outside Director Liability: A Perfect Storm

• Fiduciary Duties in Delaware LPs and LLCs

• Disloyal Behavior

• Strict Construction is Alive and Well in Third Circuit

• Lack of Entire Fairness Decision Stands; re: Allocation of Merger Proceeds to Minority

© Steve Jakubowski 2008