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
EVIDENCE SUBMITTED WITH REPLY PAPERS SHOULD HAVE BEEN CONSIDERED, NEGLIGENT MAINTENANCE CAUSE OF ACTION PROPERLY SURVIVED SUMMARY JUDGMENT IN THIS PLAYGROUND INJURY CASE (SECOND DEPT).
DEFENDANTS DID NOT DEMONSTRATE THE RAISED BRICK WAS A TRIVIAL DEFECT OR AN OPEN AND OBVIOUS DEFECT IN THIS SLIP AND FALL CASE, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED 2ND DEPT.
DEFENDANTS DID NOT DEMONSTRATE, PRIMA FACIE, THE UNEVEN SEWER GRATE WAS A TRIVIAL DEFECT; THEREFORE THE BURDEN OF PROOF NEVER SHIFTED TO THE PLAINTIFF; DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT IN THIS SLIP AND FALL CASE SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).
THE ZONING BOARD OF APPEALS’ (ZBA’S) DENIAL OF A LOT-SIZE VARIANCE CONFLICTED WITH A PRIOR RULING BASED ON SIMILAR FACTS; THEREFORE THE ZBA WAS REQUIRED TO PROVIDE A FACTUAL BASIS FOR ITS DECISION; THE DECISION, WHICH WAS SUPPORTED ONLY BY COMMUNITY OPPOSITION, WAS ARBITRARY AND CAPRICIOUS (SECOND DEPT).
RATHER THAN DISMISSING THE COMPLAINT, SUPREME COURT SHOULD HAVE ORDERED THE NECESSARY PARTIES SUMMONED (SECOND DEPT).
Court May Not Deny a Dispositive Motion on a Ground Not Raised by the Parties/Assumption of Risk Precluded Suit Based Upon Falling Off an Exercise Ball
Family Court Should Have Inquired More Deeply Into Mother’s Finances Before Ordering the Matter to Proceed Without Counsel for Mother
Evidence of Photo-Array Identification Properly Allowed to Counter Inference Line-Up Was Suggestive (Defendant Restrained in Line-Up)

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 © 2025 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

Even Though the People Indicated They Were Not Ready for Trial After Filing... Arbitrator Exceeded Her Powers to Modify an Award and Failed to Make a “Final...