Earlier this month, this Blog reported the Sixth Circuit’s decision in Booth Family Trust v. Jeffries (6th Cir. 09-3443) [PDF], which involved a shareholder derivative action against certain officers and directors of Abercrombie & Fitch Co. In Booth Family Trust, a divided panel ruled that the decision by a member of a special litigation committee (“SLC”) to recuse himself from considering the claims against one of the named defendants functioned as an effective admission that he was not independent. On that basis, the panel found that the SLC was not independent under Delaware law, and it reversed the district court’s dismissal of the case, which had been founded, in turn, on the SLC’s determination that the derivative claims were meritless.
Abercrombie, named as a nominal defendant, has now asked the Sixth Circuit for rehearing en banc. In its petition [PDF], relying upon Judge Griffin’s strong dissent in Booth Family Trust, Abercrombie claims that the panel has substantially misinterpreted Delaware law, warranting review by the entire Court. By way of relief, Abercrombie suggests reversing the panel decision or, alternatively, certifying the question to the Delaware Supreme Court for a definitive ruling on Delaware law.
Given the national importance of Delaware corporate law, the Sixth Circuit Appellate Blog will monitor the status of Abercrombie’s petition going forward.
