In this dialog, we will discuss two significant decisions involving shareholder derivative litigation against officers and directors of McDonald's Corporation. The first McDonald’s decision was particularly significant because for the first time, Delaware Chancery extended so-called Caremark duties to an officer of the corporation and not just directors. Although the second McDonald's decision did not set aside the prior decision as to officer liability, it was more in line with prior Delaware jurisprudence in dismissing the claims against independent board members.  Meta is the most recently filed such lawsuit, and the litigation is in its early stages.  Interestingly, all three cases are before Vice Chancellor J. Travis Laster.

Although the coverage implications are somewhat indirect, potential officer liability will likely warrant separate counsel for the officer(s) involved and will result in increased defense costs. There could well be other areas that bring insurers and the individual insureds into conflict such as reasonableness of settlements.