Litigation Committee's Recommendation Rejected Amid Concerns Regarding Independence and Reasonableness of Investigation

Foley Partner Gardner Davis and Associate Joanna White authored an article that appeared in the April 5, 2010 issue of the Delaware Corporate Litigation Reporter titled “Special Litigation Committee’s Recommendation Rejected Amid Concerns Regarding Independence And Reasonableness of Investigation.” The authors examine the possible impact of the Delaware Chancery Court’s decision in London v. Tyrell, stating that the message of the case is that directors should not serve on special litigation committees (SLC) unless prepared to deliver bad news to the company and the defendant directors. They add that members of an SLC must avoid the appearance of divided loyalties if the company wants the court to honor an SLC recommendation.