What Happens With the Former Board, Stays With the Former Board: Delaware Court Dismisses Claims Against Directors for Failing to Investigate Past Misconduct

In Borsody v. Gibson, the Delaware Court of Chancery dismissed all claims brought by a former director who alleged he was wrongfully ousted from Nervive, Inc. and denied stock options. The Court found the claims time-barred under the three-year statute of limitations and rejected attempts to reframe them as breaches of fiduciary duty for failing to investigate or remedy past misconduct. It further held that the directors could not be liable for contractual obligations to which they were not parties, nor could they aid and abet co-fiduciaries. The ruling underscores that equity will not revive stale claims or allow contractual disputes to be repackaged as fiduciary duty breaches.