Chancellor Chandler of the Delaware Court of Chancery yesterday issued an opinion denying motions to stay and to dismiss a derivative action involving alleged options backdating at Maxim Integrated Products, Inc. Ryan v. Gifford, No. 221-N (Del. Ch. Feb. 6, 2007). The

decision addresses many issues likely to recur in other backdating cases, though the Court limited its holding to the “unique facts” of the case.

The case arose shortly after Merrill Lynch published an analysis pointing out the “fortuitously timed stock option grants” made to Maxim executives. Suits on behalf of Maxim were then filed in federal court, California state court, and Delaware Chancery Court. In the Delaware suit filed in 2006, plaintiff named four current and two former members of the board, as defendants, claiming that they had breached their fiduciary duties of due care and loyalty.