Background - McAfee agreed to be acquired by Intel for $48/share after months of management-to-management collaboration; McAfee CEO David DeWalt led negotiations and reported to a nine-member outside board. - Intel first made a $45 nonbinding proposal (June 11, 2010); McAfee's board rejected it and sought >$50; Intel later revised to $48 and demanded exclusivity; board approved after Morgan Stanley gave a fairness opinion. - Plaintiff (Central Laborers' Pension Fund) sued derivatively on behalf of McAfee shareholders, alleging DeWalt withheld material information (notably Intel’s alleged $50 overture and Project Inca synergy work), the board failed to protect the process, proxy disclosures were incomplete, and McAfee/Intel aided and abetted breaches. - Trial court, applying Delaware law, granted summary judgment for all defendants; this appeal challenges summary judgment and the bench-trial setting. - The Court of Appeal affirmed as to the nine outside directors (exculpated for duty-of-care claims under Del. Code §102(b)(7) and no triable loyalty/good-faith issues) but reversed as to DeWalt and as to McAfee and Intel on aiding-and-abetting because triable issues remain about DeWalt’s nondisclosure. ### Issues | Issue | Plaintiff's Argument | Defendant's Argument | Held | |---|---:|---:|---:| | Whether entire-fairness review is triggered (i.e., whether director self-interest/manipulation rebutted business-judgment presumption) | DeWalt’s alleged concealment of Intel’s $50 overture and Project Inca shows self-interest and manipulation, requiring entire fairness review | No evidence that a board majority acted out of self-interest or was dominated; enhanced scrutiny (not entire fairness) applies | Entire fairness not triggered; enhanced scrutiny is the operative standard | Liability of nine outside directors for breach of fiduciary duties and disclosure omissions | Board failed to oversee conflicted management and omitted material pre-offer discussions from proxy; triable issues exist | Directors were independent, retained counsel/financial advisors, met repeatedly, and acted reasonably under circumstances; exculpatory charter clause bars care-based monetary liability | Summary judgment affirmed for the nine outside directors (no triable loyalty/good-faith issue; §102(b)(7) bars care claims) | Liability of DeWalt for breach (nondisclosure of Intel’s $50 overture and Project Inca) | DeWalt knowingly withheld material information from board/shareholders to secure self-interested outcome; creates triable issues on loyalty, good faith, care, and materiality | DeWalt negotiated for a higher price ($52–54), updated board at a high level, and had no motive to suppress a higher offer; facts permit benign inferences | Summary judgment reversed as to DeWalt: triable issues exist about his nondisclosure (possible breach of loyalty/good faith or non-exculpated duty-of-care/gross-negligence theory) | Right to jury trial under California law | Breach of fiduciary duty and aiding/abetting seek damages — legal claims entitling plaintiff to jury | Fiduciary-duty claims are equitable (trust/agent principles); internal-affairs doctrine governs substantive law but forum law controls trial mode | Court properly set bench trial: action is equitable in nature under California law, so no constitutional jury right here ### Key Cases Cited Revlon, Inc. v. MacAndrews & Forbes Holdings, 506 A.2d 173 (Del. 1986) (board duty to seek best value in sale-of-control context) Cede & Co. v. Technicolor, Inc., 634 A.2d 345 (Del. 1993) (business-judgment presumption and quantum to rebut loyalty) Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985) (board duties in defensive/transactional settings) Paramount Communications, Inc. v. QVC Network, Inc., 637 A.2d 34 (Del. 1993) (enhanced scrutiny standard for sale-process review) Mills Acquisition Co. v. Macmillan, Inc., 559 A.2d 1261 (Del. 1989) (entire fairness triggered when management illicitly manipulates sale process) Bomarko, Inc. v. International Telecharge, Inc., 794 A.2d 1161 (Del. Ch. 1999) (CEOs’ concealment/interference can require entire fairness) Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983) (conflicted directors and disclosure to minority shareholders: entire fairness burden) Lyondell Chemical Co. v. Ryan, 970 A.2d 235 (Del. 2009) (application of §102(b)(7) and enhanced-scrutiny/summary-judgment context) In re Walt Disney Co. Derivative Litigation, 906 A.2d 27 (Del. 2006) (definition of bad faith / intentional dereliction and gross negligence standard) Chen v. Howard-Anderson, 87 A.3d 648 (Del. Ch. 2014) (application of §102(b)(7) and when summary judgment may be appropriate on exculpation)