Caremark in 2026: Oversight Claims, Corporate Risk, and the High Bar for Bad Faith

Matthew D. Stachel, Partner | Paul, Weiss, Rifkind, Wharton & Garrison LLP

Matthew D. Stachel is a partner in the Litigation Department of Paul, Weiss, Rifkind, Wharton & Garrison LLP. His practice focuses on complex corporate and commercial litigation, including fiduciary-duty claims involving directors, officers, and controlling stockholders; shareholder derivative actions; mergers and acquisitions disputes; and securities litigation. He represents companies, directors, officers, and board committees in high-stakes disputes involving corporate governance and management decisions.

• Education & Credentials

Matthew earned his B.A. from the College of William & Mary and his J.D. from the University of Virginia School of Law. He is admitted to practice in Delaware.

• Recognition & Leadership

Matthew advises public companies, boards of directors, special board committees, and private equity investors and their portfolio companies on their rights and obligations under Delaware law. His representative matters include defending directors and officers in shareholder derivative litigation and representing special committees in disputes concerning significant corporate transactions, including the proposed sale of Pattern Energy Group to the Canada Pension Plan Investment Board.

• Professional Involvement

Matthew contributes to Paul, Weiss publications addressing corporate litigation and fiduciary-duty issues. He is listed among the lawyers associated with the firm’s March 2023 client memorandum, “Delaware Court of Chancery Dismisses Caremark Claims Against Directors for Failure to Allege Bad Faith Conduct.” The memorandum examines the pleading standards for Caremark oversight claims and allegations of bad faith, topics relevant to corporate governance and director oversight.

• Experience

Matthew’s litigation experience includes defending The Kraft Heinz Company and current or former officers and directors in derivative actions, representing Teladoc Health in obtaining dismissal of derivative claims, and representing Snap, Inc. and several of its directors and executives in derivative actions concerning the company’s preparation for Apple’s privacy changes. His other derivative-litigation matters include Alexion Pharmaceuticals, Nikola Corporation, World Wrestling Entertainment, and NextEra Energy.

He has also represented directors and officers in fiduciary-duty disputes arising from major corporate transactions, including Bioverativ’s $11.6 billion sale to Sanofi and the $43 billion WarnerMedia–Discovery merger. In other complex commercial and securities matters, he represented ExxonMobil and certain former executives in defeating a $3 billion securities fraud case at trial and International Construction Products in securing a $100 million jury verdict against Caterpillar.

SESSION 1 – Caremark Oversight Claims: Red Flags, Reporting Systems, and Fiduciary Duties | Matthew D. Stachel | 12:00pm – 1:00pm

This session will examine the current standards governing Caremark oversight claims against directors and officers, focusing on the distinction between ordinary corporate mismanagement and actionable bad-faith failures of oversight. The discussion will explore corporate reporting systems, mission-critical risks, red flags, and the circumstances under which oversight failures may create fiduciary liability.

BREAK | 1:00pm – 1:10pm

SESSION 2 – Building and Defending Caremark Claims: From Section 220 to Dismissal | Matthew D. Stachel | 1:10pm – 2:10pm

This session will focus on the litigation path from a stockholder’s pre-suit investigation through pleading and dismissal of a Caremark claim. Attorneys will examine how Section 220 materials can be used to develop oversight allegations, how demand futility affects derivative claims, and the strategies available to defendants challenging inadequately pleaded oversight claims.