Sean Brennecke Authors ABA Article on Recent Delaware Demand Futility Decision Involving “Big Three” Pharmaceutical Distributor

Wilmington, Del. (January 11, 2023) - Wilmington Partner Sean M. Brennecke recently authored an article for ABA Business Law Today, titled, “Southern District of West Virginia Decision Underlies Dismissal of AmerisourceBergen Shareholders’ Derivative Action.” The article analyzes a recent Delaware Chancery Court demand futility decision involving AmerisourceBergen Corporation – one of the “big three” wholesale pharmaceutical distributors implicated in the nationwide opioid epidemic and related litigation.

Mr. Brennecke opens the article by explaining that AmerisourceBergen has paid over $6 billion in damages and has incurred over $1 billion in legal fees in connection with its role in our country’s opioid crisis. He goes on to detail the matter of Lebanon County Employees’ Retirement Fund v. Collis, et al., in which AmerisourceBergen’s stockholders sought to hold the company’s directors and officers personally liable for those damages and fees.

Stating that the Delaware Chancery Court ultimately dismissed the action because the plaintiffs failed to meet the “demand futility” requirement, Mr. Brennecke describes, “This case is notable because of the high-profile nature of the allegations, and the fact that the Court dismissed the case notwithstanding its finding that the allegations would ordinarily be sufficient to survive a motion to dismiss.” The author discusses the court’s analysis on each of the plaintiffs’ arguments – including its review of a decision involving AmerisourceBergen from the Southern District of West Virginia. Mr. Brennecke then concludes the article by observing that “perhaps the most important theme is one that has been echoed by the Delaware Chancery Court for years—that equity is not a plug-and-play concept, and the Court may be required to consider the larger picture.”

Mr. Brennecke, who joined Lewis Brisbois last year, is a member of the firm's Complex Business & Commercial Litigation, Corporate, and Bankruptcy & Insolvency Practices. For more than 15 years, he has represented corporations and alternative entities as well as their respective directors, officers, shareholders, members, and managers in complex litigation matters.

Read the full ABA Business Law Today article here and the abbreviated version in Business Law Today’s Month-In-Brief: Business Litigation & Dispute Resolution section here.