Chancery Provides First Interpretation of Recently Amended DGCL Section 144

Short summary

Delaware's Court of Chancery interpreted amended DGCL § 144(d)(2), holding that directors deemed independent by stock exchanges face a heightened presumption of disinterestedness in derivative suits, requiring plaintiffs to plead substantial and particularized facts of bias. The decision rejected claims that board ties, fees, and co-investments demonstrated material conflicts. The ruling clarifies legislative intent to strengthen director independence presumptions beyond traditional Rule 23.1 standards.

• •DGCL § 144(d)(2) heightens the presumption of independence for exchange-independent directors in derivative suits
• •Plaintiffs must plead 'substantial and particularized' facts to rebut the presumption—ties, fees, and co-investments alone don't suffice
• •The statute's broad language signals intent to strengthen director independence protection beyond shareholder derivative suit standards

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