Judge dismisses Meta shareholder lawsuit claiming that directors' obligations extend beyond company

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A Delaware judge has dismissed a shareholder lawsuit asserting novel claims about the roles of corporate leaders and arguing that the loyalties of Meta directors and company founder Mark Zuckerberg should not lie exclusively with the social media giant.

TechFILE - A person stands in front of a Meta sign outside of the company's headquarters in Menlo Park, Calif., March 7, 2023. A Delaware judge on Tuesday, April 30, 2024, dismissed a shareholder lawsuit asserting novel claims about the roles of corporate leaders and arguing that the loyalties of Meta directors and company founder Mark Zuckerberg should not lie exclusively with the social media giant.

Laster noted that, under the “standard Delaware formulation” of corporate law, directors of a corporation owe duties to the stockholders as investors in that corporation. While Delaware law requires corporate directors to act in the best interests of their stockholders, including maximizing the value of their shares, attorneys for McRitchie argued that Delaware courts should recognize a “portfolio theory” of corporate governance that takes into account external factors.

 

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