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Bloomberg Law Publishes Two-Part Series on Duty of Oversight and COVID-19 by Ropes & Gray Litigators

Practices: Litigation

C. Thomas Brown, Greg Demers, Deanna Minasi and Chris Nienhaus co-authored a two-part “Professional Perspectives” series for Bloomberg Law that examines developments in duty of oversight case law through the lens of the unique challenges posed by the Covid-19 pandemic.

Claims designed to hold directors personally liable for failure to oversee company operations—so-called Caremark claims—historically have met stiff resistance in the courts. Yet, in several recent cases Delaware courts have denied motions to dismiss Caremark claims, prompting some to question whether the standard for pleading such claims has relaxed, and whether a once-reliable protection for directors has eroded. Covid-19 brings renewed focus on this question, as it raises unique challenges for Boards of Directors and presents novel risks to both the financial health of the company and the physical health of the company's employees.

Part I examines the Caremark standard and existing case law, and offers practical takeaways for directors in the context of Covid-19. Part II contains a checklist of key considerations for directors navigating times of crisis.

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