Litigating Demand Refusal and Demand Futility in a Shareholder Derivative Action | Practical Law

Litigating Demand Refusal and Demand Futility in a Shareholder Derivative Action | Practical Law

A Practice Note addressing the litigation in a shareholder derivative action over the sufficiency of a plaintiff's allegations about its pre-suit demand efforts as required under Federal Rule of Civil Procedure 23.1 and Delaware Court of Chancery Rule 23.1. This Note discusses the wrongful refusal showing required when the board denies a demand, the demand futility showing required when the plaintiff alleges demand is futile and should be excused, and defendants' defenses against a plaintiff's pre-suit demand allegations of gross negligence, bad faith, lack of independence, and interestedness.

Litigating Demand Refusal and Demand Futility in a Shareholder Derivative Action

Practical Law Practice Note w-019-6893 (Approx. 26 pages)

Litigating Demand Refusal and Demand Futility in a Shareholder Derivative Action

by Practical Law Commercial Litigation
MaintainedDelaware, USA (National/Federal)
A Practice Note addressing the litigation in a shareholder derivative action over the sufficiency of a plaintiff's allegations about its pre-suit demand efforts as required under Federal Rule of Civil Procedure 23.1 and Delaware Court of Chancery Rule 23.1. This Note discusses the wrongful refusal showing required when the board denies a demand, the demand futility showing required when the plaintiff alleges demand is futile and should be excused, and defendants' defenses against a plaintiff's pre-suit demand allegations of gross negligence, bad faith, lack of independence, and interestedness.