H. Justin Pace & Lawrence J. Trautman, Mission Critical: Caremark, Blue Bell, and Director Responsibility for Cybersecurity Governance, 2022 Wis. L. Rev. 887 (2022).
Abstract
If the potential for Caremark liability hangs like the sword of Damocles over corporate directors of Delaware Corporations, then that sword has been considerably more secure than that of the original myth. For decades, Chancellor Allen’s description of a Caremark claim as “possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgement” held true. Caremark claims that survived a motion to dismiss were for decades few and far between. That changed in 2019. In the space of little over two years, Delaware courts have allowed five Caremark claims to survive a motion to dismiss. The thread holding that sword is beginning to look more like the single horsehair of myth.