Comment by Peter D. Bordonaro
The evolution of the Delaware good faith doctrine has created several viable interpretations as to how good faith fits into Delaware's fiduciary duty framework. In the recent past, the Delaware Supreme Court has alluded to the fact that the duty of good faith does stand on equal footing with the duties of care and loyalty, while the Delaware Court of Chancery has maintained that an independent duty of good faith does not exist. Settling this debate in Stone v. Ritter, the Delaware Supreme Court clarified that good faith is a “necessary condition to liability” for a violation of the duty of loyalty. However, the subsequent application of the Stone holding by the Court of the Chancery appears to create inconsistency in the good faith doctrine.
This Comment first explores the history of the good faith doctrine, up to and including the landmark Stone decision in 2006. Several commentators have responded to this seminal decision with concerns and worries. Next, this Comment examines the scholarly responses to Stone. Finally, this Comment seeks to demonstrate that several crucial questions regarding good faith remain unanswered, and further refinement of the Delaware good faith doctrine is necessary.
About the Author
Peter D. Bordonaro. J.D. candidate 2008, Tulane University School of Law; B.S. 2005, The George Washington University.
Citation
82 Tul. L. Rev. 1119 (2008)