A recent decision from the Delaware Court of Chancery addressed damages for breach of the fiduciary duty of loyalty where they were not capable of precise measurement, and there was also a claim for spoliation. The most recent decision in this matter addresses damages. Sorrento Theraupetics, Inc. v. Mack, C.A. No. 2021-0210-PAF (Del. Ch. July 31, 2025). The detailed factual background was addressed in a prior post-trial decision which found a breach of the fiduciary duty of loyalty, and a violation of a trade secrets statute related to unlawful competition. See Sorrento Theraupetics, Inc. v. Mack, 2023 WL 5670689 (Del. Ch. Sept. 1, 2023)

This 52-page opinion deserves careful review for the important factual details and nuances that imbue the analysis, as well as the multiple issues addressed, but this short post will just highlight several aspects of the Court’s reasoning and the remedies awarded that are most interesting to me.

• The Court observed that Chancery has broad equitable powers to fashion a remedy when complicated factual details and other circumstances make the award of a remedy an inherently imprecise process. Slip op. at 9-10. The Court also cited to ample precedent to explain that, especially in the context of a breach of the fiduciary duty of loyalty, the amount of damages need not be precisely measurable. Slip op. at 25-27.
• The Court awarded damages in the amount of the entire salary of the fiduciary who engaged in disloyal conduct for the entire period during which he was president of the company involved. The Court carefully reasoned that his entire salary during that period would be calculated as damages.
• But, the Court rejected the request by the plaintiff to also include as damages the salaries of several colleagues who worked with the faithless fiduciary because the Court found that the plaintiffs did not prove those damages. Put differently, the Court credited the defense argument that the time spent by those employees on prohibited behavior was de minimis, and by implication that most of their time was spent on proper activities.
• In sum, the Court found that the plaintiff did not prove damages by showing how much of the time was spent on improper activities by those colleagues. That is, damages in the amount of their salaries was not proven. Slip op. at 23-26.
• As an exception to the American rule, and as a component of damages for breach of the duty of loyalty that the Court found was willful and malicious, and in light of damages not being readily measurable, the Court awarded one-third of the fees incurred in pursuit of the litigation. The Court had also found a breach of the applicable, trade secrets statute that also gave the court addition discretion to award remedies See Slip op. at 45-46.
• The Court also awarded fees based on spoliation of evidence because the same fiduciary who breached his fiduciary duty of loyalty, also deleted hundreds of documents—but denied doing so. The defendant even suggested, with no credibility, that his children may have deleted the documents. See Slip op. at 48 and footnote 130. [Although the Court had also previously found that the defendant violated a trade secrets statute, the award of fees, based on that statute, was discretionary. Still, it was part of the Court’s analysis in connection with its award of one-third of the fees incurred.]