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Business Organizations Keyed to Allen
Marchand v. Barnhill
Citation:
212 A.3d 805 (Del. 2019).Facts
Paul Kruse was Blue Bell’s CEO when there was a listeria outbreak at Blue Bell’s facilities. At that time, Blue Bell had a 15 person board of directors. The lower court found that seven of the 15 directors were not independent of Kruse, but that one, W.J. Rankin, was independent despite his ties to the Kruse family. Rankin was a member of Blue Bell’s board and CFO. Over Rankin’s 28 year long career he received multiple opportunities and mentoring from Ed Kruse (Paul’s father). Rankin started as Ed’s administrative assistant before rising through managerial ranks to achieve the role of CFO. Rankin was added to Blue Bell’s board on the support from the Kruse family and, after the Kruse family spearheaded a charitable efforts at a local college, had a building named for him. During his time on the board, Rankin voted against Kruse in a board initiative to split the CEO and Chairman positions.
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