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But, Delaware law provides no exculpation for claims against officers.
Count two states a claim for breach of the duty of care against Magnacca in his capacity as CEO. Radio Shack Corporation was a well-established retailer of consumer electrical goods for almost a century.
That is because if there is no satisfactory answer, it suggests that the duty at issue is not loyalty, but care.
But, where, as here, the directors are said to have breached their duty of loyalty, it is fair to ask why.
First, Standard General and its chief investment officer, Soohyung Kim, caused Magnacca to be appointed to the board of American Apparel, a struggling affiliate of Standard General.
(AC ¶ 32) These closures would reduce working capital needs from 0-0 million to 0-0 million.
Second, why would the independent directors knowingly sacrifice the company so that Magnacca could achieve his personal agenda? One might say that it is not the plaintiff's job to explain the personal motivations of men and women; that the facts speak for themselves.
The Trust alleges that the independent directors breached their duty of loyalty when they approved Magnacca's appointment to the board of American Apparel, and then made him the point man to negotiate with Standard General with respect to the financing that allegedly led to Radio Shack's demise. First, why would Magnacca sacrifice his position as head of one of America's most "iconic" retailers in exchange for such paltry and illusory consideration?
(AC ¶ 19) The Trust was empowered by the plan to continue this lawsuit, which originally was filed by the Official Committee of Unsecured Creditors for Radio Shack. Solomon Company ("PJSC") to assist in raising capital. (AC ¶¶ 27-28) Significantly, the Salus Loan prohibited Radio Shack from closing more than 200 stores in a year without Salus's consent.
(AC ¶ 17) The principal beneficiaries of the Trust are creditors of Radio Shack. Magnacca is the former chief executive officer and a former member of the board of Radio Shack. (AC ¶ 26) In December 2013 Radio Shack entered into two new loan facilities: a 5-year, 5 million secured credit agreement with G. (AC ¶ 29) Notwithstanding the new financing, in February 2014 the directors were advised that the company's liquidity prospects were so dire that they needed to consider "strategic alternatives such as joint ventures, partnership, investments and/or a sale ...