Delaware court dismisses action against residents of Singapore.
Chief Judge Gregory M. Sleet of the United States District Court for the District of Delaware dismissed claims alleging fraud and aiding and abetting a breach of fiduciary duty brought against two of Greenberg Freeman’s clients residing in the Republic of Singapore based upon insufficient service of process.
The plaintiff, a publicly traded corporation, claimed that the defendants were de facto directors of the corporation by reason of actions allegedly taken in concert with the former president and CEO, and, therefore, were subject to service of process under the procedures set forth in the Delaware director consent statute, which provides that an out-of-state director of a Delaware corporation can be served through the Secretary of State in an action alleging that the director breached his or her fiduciary duty to the corporation. In moving to dismiss, Michael Freeman, appearing on behalf of Greenberg Freeman, argued that the statute applies only to a person who actually served as a director and, further, only in cases alleging a direct claim for breach of fiduciary duty, not a claim for aiding and abetting a supposed breach by another. The Chief Judge agreed, and dismissed the firm’s clients from the case without even providing the plaintiff an opportunity to respond, finding that any opposition to the motion would be futile.