Industry Blogs and Articles

Fiduciary Duties: Duties of Constituency Directors

In Guilbeau v. Footprint International Holdco, Inc., the Delaware Court of Chancery reaffirmed that directors owe fiduciary duties to the corporation and all shareholders in the aggregate, not to the specific group that appointed them. The case involved Class A preferred stockholders challenging a cram‑down financing plan and raised the question of whether constituency directors could prioritize their appointing shareholders. Vice Chancellor Laster emphasized that Delaware law rejects the notion of directors serving a subset of stockholders, reinforcing the duty of loyalty to the entire equity base. The ruling clarifies the legal limits on blockholder‑appointed directors.