Kaan Ekiner and Mark Felger, writing in the Delaware Business Court Insider, discuss Giuliano v. Grenfell-Gardner, 2025 WL 2502176 (Del. Ch. Sept. 2, 2025), a case where Caremark claims were filed against former directors and officers of Teligent, Inc., a generic pharmaceutical company. The claims alleged that Teligent’s management and board had failed to establish or monitor systems ensuring compliance with FDA regulations, leading to repeated violations and ultimately, the company’s insolvency. Chancellor McCormick’s decision affirms that corporate fiduciaries cannot disregard fundamental regulatory compliance. The court held that Teligent’s board plausibly committed an “utter failure” to implement oversight systems, exposing the company to escalating FDA sanctions and ultimately leading to bankruptcy, while also simultaneously recognizing limits on Caremark theories—rejecting red-flag and negligence claims while extending officer liability in defined contexts.
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