# kaal:claim:1558614-027

**Claim.** In In re Citigroup the Delaware Court of Chancery refused to extend the Caremark oversight duty, which concerns monitoring for illegal conduct, into oversight liability for business risk, so an inability to predict the future and an incorrect evaluation of business risk are not breaches of a director's oversight responsibilities.

**Type.** empirical  **Support.** evidenced

**Holds when.**

- Delaware law; derivative claims premised on subprime exposure
- oversight liability requires showing the directors knew they were not discharging their duties or consciously disregarded them

**Source quote.**

> under the Caremark line of cases would 133 not be extended to impose oversight liability for business risk

**From.** Painter and Kaal, *Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in* (2010), IV.B.5. No Excessive Risk Taking, No Hazard Decision, page 34

**Cite as.** Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614

**Verify.** sha256 of source PDF `e898211630f4116879329d6de8397523dca5b066864147421aa5cbc7429dc83b` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Painter%20and%20Kaal%20-%202010%20-%20Initial%20Reflections%20on%20an%20Evolving%20Standard%20Constraints%20on%20Risk%20Taking%20by%20Directors%20and%20Officers%20in.pdf

**Failure mode.** no oversight duty for business risk  (family: board-and-oversight-failure)

**Topics.** law-and-legal-systems, risk-and-incentives

**Keywords.** caremark, citigroup, oversight-liability, delaware, business-risk

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/kaal-2013-acomparativeperspectiveo-005
- extended_by: https://wulfkaal.github.io/claims/kaal-2013-acomparativeperspectiveo-014

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