Delaware Chancery Court Finds Duty of Loyalty Breach By Director-Representative of Hedge Fund Stockholder of Rural/Metro
On October 10, 2014, Vice Chancellor Laster issued a post-trial decision in In Re Rural/Metro Corporation Stockholders Litigation, setting the amount of damages owed by RBC Capital Markets for aiding and abetting fiduciary duty breaches by the board of directors of Rural/Metro Corporation in connection with its 2011 sale to Warburg Pincus LLC. In determining the amount of RBC’s liability, the Court also evaluated the conduct of the Rural directors and concluded that several had committed breaches of their duty of loyalty, for which exculpation of personal liability is not permissible, including a director who served as the representative of a hedge fund which was a large Rural stockholder.