You are here: / / Delaware Pleading Requirements Not Met in Shareholders’ Derivative...
,

Delaware Pleading Requirements Not Met in Shareholders’ Derivative Action

The Second Department determined the shareholders’ derivative action alleging breach of a fiduciary duty was properly dismissed for failure to meet the pleading requirements of the controlling Delaware law:

As the parties agree, the laws of Delaware, the State of incorporation, govern the issues raised on this appeal … . Delaware Chancery Court Rule 23.1(a) provides that every shareholders’ derivative complaint shall “allege with particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff desires from the directors or comparable authority and the reasons for the plaintiff’s failure to obtain the action or for not making the effort.” A plaintiff’s demand on the directors pursuant to Rule 23.1(a) will be excused “if the derivative complaint pleads particularized facts creating a reasonable doubt that (1) the directors are disinterested and independent or (2) the challenged transaction was otherwise the product of a valid exercise of business judgment” … . Demand may also be excused in certain circumstances “where particularized factual allegations create a reasonable doubt that, as of the time the complaint was filed, the board of directors could have properly exercised its independent and disinterested business judgment in responding to a demand” … . Here, the allegations of the amended complaint were insufficient to satisfy the pleading requirements of Rule 23.1(a). Walter v FalconStor Software, Inc., 2015 NY Slip Op 02112, 2nd Dept 3-18-15

 

You might also like
A MUNICIPALITY HAS A DUTY TO INSPECT TREES ADJACENT TO ROADWAYS EVEN IF THE TREES ARE NOT ON THE MUNICIPALITY’S LAND; HERE THE MUNICIPALITY DID NOT DEMONSTRATE IT DID NOT HAVE CONSTRUCTIVE NOTICE OF THE CONDITION OF THE TREE WHICH FELL ON PLAINTIFFS CAR (SECOND DEPT).
THE MOTION SEEKING A CIVIL CONTEMPT DETERMINATION COULD NOT BE HEARD BECAUSE THE UNDERLYING SUIT HAD BEEN SETTLED BY STIPULATION WITH PREJUDICE, STRIPPING SUPREME COURT OF SUBJECT MATTER JURISDICTION; A SUBJECT-MATTER-JURISDICTION ISSUE CAN BE RAISED FOR THE FIRST TIME ON APPEAL (SECOND DEPT).
Court Could Not Promise a “Violent Felony Override” Allowing Defendant to Participate in Programs While Incarcerated—Only the DOCCS Can Determine Defendant’s Eligibility—Conviction by Guilty Plea Reversed
PLAINTIFF’S FAILURE TO COMPLY WITH DISCOVERY DEMANDS AND A CONDITIONAL ORDER WARRANTED DISMISSAL OF THE COMPLAINT PURSUANT TO CPLR 3126 (SECOND DEPT).
Father’s Recording of Defendant’s Berating and Threatening Father’s Child Admissible Under the “Vicarious Consent” Theory (Father Vicariously Consented, on Behalf of the Child, to the Recording)/Variance Between Jury Instruction and Charges in the Indictment Was Harmless Error–No Possibility Defendant Was Convicted of a Theory Not Encompassed by the Indictment
Interest Pursuant to CPLR 5002 and 5003 Is a Matter of Right Not Dependent Upon the Court’s Discretion or a Demand
Jury’s Finding a Party Was at Fault But Such Fault Was Not the Proximate Cause of the Accident Should Not Have Been Set Aside as Inconsistent and Against the Weight of the Evidence
QUESTIONS OF FACT WHETHER AUTOMOBILE LIFT WAS INTENDED TO BE USED WITHOUT A PROTECTIVE DEVICE AND WHETHER WARNINGS WERE ADEQUATE.

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

Invoices Together with Purchase Orders Created an Agreement to a Reduced Sales-Contract... Defendant Did Not Have the Right to Be Present During Discussion of Exclusion...