In re Citigroup Inc. Shareholder Derivative Litigation
In In re Citigroup Inc. Shareholder Derivative Litigation (964 A.2d 106 [Del Ch 2009]), the Delaware Court of Chancery dismissed, pursuant to a similar exculpation clause and the "business judgment rule," claims that the directors of Citigroup, Inc. breached their fiduciary duties by failing to disclose or prevent monumental losses to its inventory of "subprime" loans, which the directors allegedly knew, or should have known, were imminent in light of various "red flags" (id. at 129-131).
In reaching this decision, the court explained that "in any business decision that turns out poorly there will likely be signs that one could point to and argue are evidence that the decision was wrong," but such "signs," without more, are insufficient to demonstrate that the decisionmaker consciously disregarded his duties (id. at 131).