Delaware Chancellor Refuses to Dismiss BackDating Option Case

Delaware Chancellor Chandler refused to dismiss a derivative suit against the board of Maxim Integrated Products claiming breach of fiduciary duty based on backdating stock options, stating: "I am convinced that the intentional violation of a shareholder approved stock option plan, coupled with fraudulent disclosures regarding the directors' purported compliance with that plan, constitute conduct that is disloyal to the corporation and is therefore an act in bad faith." Previous cases, in other jurisdictions, have supported defendants.  See WSJ, Maxim Ruling Opens Door For Backdating Cases.