Court of Chancery of Delaware

In an action brought by a litigation trust arising from the bankruptcy of a Bermudan holding company and its top U.S. subsidiary, the court finds that: 1) the litigation trust lacked standing to pursue claims on behalf of the subsidiary's creditors; 2) plaintiff failed to state a claim for breach of fiduciary duty against the holding company's former directors or against the subsidiary's former directors; 3) Delaware law does not recognize a cause of action for "deepening insolvency"; 4) the complaint failed to state a claim for fraud against the former directors of the companies; 5) challenges to a transaction were time-barred; and 6) claims against third-party professional advisors must be dismissed.

Appellate Information

• Decided 08/10/2006
• Published 08/24/2006

Judges

Court

• Court of Chancery of Delaware

Counsel

• For Appellant:
  
• Neil B. Glassman, and Peter B. Ladig, The Bayard Firm, Wilmington, DE;  Paul B. Lackey, and Elizabeth K. Stepp, Lackey Hershman, L.L.P., Dallas, TX, for Plaintiff.


• For Appellees:
  
• Allen M. Terrell, Jr., Richard P. Rollo, Richards, Layton & Finger, P.A., Wilmington, DE;  William B. Dawson, J. Stuart Tonkinson, Vinson & Elkins, L.L.P., Dallas, TX, for Defendant Ernst & Young, L.L.P., A. Gilchrist Sparks, III, and Alan J. Stone, Morris, Nichols, Arsht & Tunnell, Wilmington, DE;  Howard M. Shapiro, Jonathan E. Paikin, Kyle M. DeYoung, and Will L. Crossley, Jr., Wilmer Cutler Pickering Hale and Dorr, L.L.P., Washington, DC, for Defendant PriceWaterhouseCoopers, L.L.C., Arthur G. Connolly, III, Connolly Bove Lodge & Hutz, L.L.P., Wilmington, DE;  Howard W. Gutman, George A. Borden and Ryan T. Scarborough, Williams & Connolly, L.L.P., Washington, DC, for Defendant Baker & McKenzie, L.L.P., Brett D. Fallon, and Joseph S. Naylor, Morris, James, Hitchens & Williams, L.L.P., Wilmington, DE;  R. Timothy Muth and Ryan S. Stippich, Reinhart Boerner Van Deuren, Milwaukee, WI, for Defendant Milliman, Inc., J. Travis Laster, Abrams & Laster, L.L.P., Wilmington, DE;  Richard W. Reinthaler, Michael C. Hefter, and Konstantin Chelney, Dewey Ballantine, L.L.P., New York City, for Defendants James F. Billett, Jr., Stephen H. Binet, Anthony S. Brown, Richard E. Cole, Robert M. DeMichele, Neil Dunn, Paul Feldsher, Robert A. Giambo, Frank E. Grzelecki, Alan L. Hunte, Anthony Jacobs, James E. Roberts, Joseph D. Sargent, Frederick D. Watkins, and Stephen R. Wilcox.