Judges are naturally and rightly reluctant to dismiss cases at the pleadings stage before meaningful discovery has occurred. This reluctance is due in part to a concern that fuller discovery might lead to a cognizable claim. It is also due to the judge’s concern that if he is wrong, injured parties will be denied their day in court. These concerns are only compounded where, as here, thousands have been injured by the collapse of an iconic retailer.
But extraordinary injury does not justify a court setting aside its own judgment as to what is right under the law. Moreover, directors are entitled to the same protections under the law as all other litigants. If the claims against them lack merit, it is of little comfort to them that other injured parties had their day in court. One who has suffered the expense, indignity, and stress of defending his name and reputation in a public forum may find that eventual exoneration is somewhat hollow. That is why judges are not free to defer making hard decisions out of concern that there may be “something more.”
RSH Liquidating Trust v. Magnacca, 553 B.R. 298 (Bankr. N.D. Tex. 2016)
(dismissing claims against directors of Radio Shack)