Opinion ID: 814830
Heading Depth: 3
Heading Rank: 1

Heading: Leslie Highley, Jr.7

Text: We begin with the most straightforward case. Plaintiffs allege and defendants do not contest that Leslie Highley, Jr. is an insider with extensive ties to UBS AG affiliates. In addition to being a director of each Fund, Highley is an executive employee of both UBS Trust, where he is Managing Director and Executive Vice President, and UBS Financial, where he is Senior Vice President. For several years, Highley has also acted on behalf of UBS Trust as portfolio manager for several of the Funds. In other words, Highley is involved at a high level with both institutional defendants. The district court correctly held that these facts alone are sufficient to create a reasonable doubt that he could be disinterested and independent in evaluating plaintiffs' demand in this case. See Orman, 794 A.2d at 25 n.50. 7 Four directors – Highley, Ferrer, Ubiñas, and Roussin – are defendants in this suit in their individual capacity for alleged violation of section 20(a) of the Exchange Act. Though this personal liability claim might seem strong support for the proposition that they could not evaluate demand with disinterest and independence, the Delaware Supreme Court noted in Aronson that the mere threat of personal liability for approving a questioned transaction, standing alone, is insufficient to challenge either the independence or disinterestedness of directors. 473 A.2d at 815. Later decisions have interpreted Aronson to mean that only a substantial likelihood of personal liability is enough to establish demand futility. See, e.g., Wood, 953 A.2d at 141 n.11. Because we find there are significant alternative factual allegations to establish that a majority of the board was not independent and disinterested, we pass no judgment as to whether the allegations against the individual directors create a substantial likelihood of personal liability. -19-