Directors, officers and other governing authorities of Delaware entities generally owe fiduciary duties to the entities’ equity holders (and, at times, creditors) and those fiduciary duties are governed by Delaware law. Because Morris Nichols has only one office – in Wilmington, Delaware – our attorneys focus on the nuanced body of Delaware case law governing fiduciary duties, which is a body of case law that has been developing for over a century.
When a potential transaction creates an actual or potential conflict of interest in the boardroom, directors will often form a “special committee” of disinterested directors to address that conflict in an effort to protect the transaction from scrutiny and minimize the potential liability of directors. Such conflicts may include proposed going-private transactions or other transactions with a controlling stockholder or conflicted board, drop-down transactions in the master limited partnership ("MLP") context, or demands to sue one or more of the entity’s directors.
Our counseling attorneys and litigators work together to advise directors on all aspects of the special committee and demand review process, including drafting the committee charter to ensure the committee members are granted the authority they need to carry out their mandate, identifying and assisting with the retention of financial advisors, advising the committee members throughout the process to ensure they meet the standards for director conduct, drafting transaction documents, and defending the members of the committee in any litigation arising out of their work.