Case Explained: In re: SCHLETTER, INC. Debtor. —————————— CAROL BLACK, Plan Administrator of Liquidating Debtor, Schletter, Inc. Plaintiff – v. DENNIS BRICE Defendant –

Court: United States Court of Appeals for the Fourth Circuit Filed: 2026-06-29 The Fourth Circuit affirmed the district court’s order upholding the bankruptcy court’s grant of summary judgment in favor of Dennis Brice, holding that the Plan Administrator failed to establish a valid claim for breach of fiduciary duty or a *Caremark* claim under Delaware law. The court determined that because there was no evidence Schletter, Inc. was insolvent during Brice’s tenure as CEO, his fiduciary duties were owed solely to its parent company, Schletter Germany, rather than to the corporation’s creditors; the “zone of insolvency” doctrine does not shift these duties under Delaware precedent. Furthermore, the court concluded that the allegations regarding Brice’s management of the failed G-Max project constituted business decisions subject to the business judgment rule, rather than a *Caremark* claim for failure to monitor corporate misconduct or violations of law. Applying de novo review and Federal Rule of Civil Procedure 56 standards, the court found that Black failed to produce specific evidence beyond the pleadings showing Brice consciously failed to oversee operations regarding illegal conduct or that he ignored red flags of wrongdoing, as required to overcome the presumption of good faith. Consequently, the judgment in favor of Brice stands, and no further relief is available to the Plaintiff on these grounds. Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.