Document: Stone v. Ritter, No 93, 2006, Holland, J. (Del. Nov. 6, 2006)

The Court affirmed the Court of Chancery’s dismissal, for failure to adequately plead demand futility, where the plaintiffs alleged that directors breached their duty of good faith by failing to implement information and reporting systems required by law. The Court reached its decision on the basis that the fiduciary duty of good faith was a subset of the duty of loyalty, and thus the directors were required to know that they were neglecting a duty before personal liability could be imposed.