Commercial Division Blog: Current Developments in the Commercial Divisions of the New York State Courts

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January 12, 2022 Court Further Explains Denial of Motion to Approve Settlement in Derivative Lawsuit
On December 31, 2021, in Matter of Renren Inc. Derivative Litig. v. XXX, Index No. 653594/2018, 2021 NY Slip Op 51281[U], Justice Andrew S. Borrok issued an additional supplemental order explaining the Court’s denial of a motion to approve a settlement in a derivative lawsuit and granting leave to defendants to move to dismiss certain plaintiffs. Read More
December 27, 2021 Derivative Action Against Icahn Defendants Survived Motion to Dismiss Despite Absence of Damages
On November 18, 2021, the First Department, in Miami Firefighters' Relief & Pension Fund v Icahn, 2021 NY Slip Op 06446, unanimously reversed the decision of Justice Barry R. Ostrager granting defendants’ motion to dismiss the causes of action for breach of fiduciary duty and breach of contract in a derivative action brought against Icahn and other defendants for using confidential information about Xerox’s planned acquisition of HP Inc. to buy HP shares. The lower court granted the motion based on the Icahn defendants’ affidavit which purported to show a loss resulting from the relevant stock trades. The First Department explained that a loss does not foreclose the possibility that the Icahn defendants used Xerox confidential information to their advantage: Read More
January 11, 2021 Shareholder of Dissolved LLC Has Standing to Bring Derivative Action
On December 9, 2020, Justice Emerson of the Suffolk County Commercial Division issued a decision in … Read More
January 10, 2021 Conflict Claims Insufficient for Derivative Claim to Survive
On December 23, 2020, Justice Borrok of the New York County Commercial Division issued a decision in… Read More
August 30, 2020 Trust Beneficiary Cannot Sue On Behalf of Trust Unless She Has Made a Demand on the Trustee and the Trustee Has Refused
On August 27, 2020, the First Department issued a decision in Zachariou v. Manios, 2020 NY Slip Op. … Read More
June 29, 2020 Derivative Action Dismissed for Failure to Give Board Adequate Time to Respond to Demand
On April 4, 2020, Justice Masley of the New York County Commercial Division issued a decision in D. … Read More
June 27, 2020 Derivative Claims Based on Misconduct of Corporate Officers Barred by In Pari Delicto Doctrine
On June 4, 2020, Justice Cohen of the New York County Commercial Division issued a decision in Rutig… Read More
April 28, 2020 Demand Futility Allegations Fail to Overcome High Bar Where Outside Directors are Insulated from Monetary Liability
On April 13, 2020, Justice Scarpulla of the New York County Commercial Division issued a decision in… Read More
April 4, 2020 Decision in Derivative Action by Different Shareholder Has Res Judicata Effect on Later Suit by Different Shareholder
On March 18, 2020, the Second Department issued a decision in Noor v. Mahmood, 2020 NY Slip Op. 0192… Read More
February 16, 2020 Deceased Partner's Estate Does Not Have Standing to Seek Limited Partnership's Dissolution
On February 5, 2020, Justice Borrok of the New York County Commercial Division issued a decision in … Read More
November 23, 2019 Derivative Claims Allowed to go Forward; Demand Futility was Properly Alleged
On November 13, 2019, the Second Department issued a decision in Guzman v. Kordonsky, 2019 NY Slip O… Read More
October 9, 2019 Derivative and Individual Claims Based on Same Facts Cannot be Brought in Same Action
On September 23, 2019, Justice Scarpulla of the New York County Commercial Division issued a decisio… Read More
October 6, 2019 Derivative Claims Against LLC's Non-Managing Members Dismissed
On September 27, 2019, Justice Schecter of the New York County Commercial Division issued a decision… Read More
July 29, 2019 Derivative Action Dismissed for Failure to Make Demand/Adequately Plead Demand Futility
On June 28, 2019, Justice Masley of the New York County Commercial Division issued a decision in Gam… Read More
July 23, 2019 Claim Dismissed as Derivative, Not Direct
On July 5, 2019, Justice Masley of the New York County Commercial Division issued a decision in 600-… Read More
March 27, 2019 Claims Relating to Injury to LLC Permissible Direct Claims When They Also Relate to Separate Injury to Plaintiff
On March 12, 2019, Justice Schecter of the New York County Commercial Division issued a decision in… Read More
February 6, 2019 Partnership Not Entitled to Recover Fees from Derivative Action Plaintiff When Security for Fees Not Posted
On January 31, 2019, the First Department issued a decision in NWM Capital, LLC v. Scharfman, 2019 N… Read More
December 5, 2018 Mere Theory as to the Board's Misconduct Insufficient to Plead Demand Futility With Particularity
On November 15, 2018, Justice Ramos of the New York County Commercial Division issued a decision in … Read More
November 11, 2018 Plaintiff Asserting Derivative Claims Must be Represented by Counsel
On November 1, 2018, Justice Schecter of the New York County Commercial Division issued a decision i… Read More
October 10, 2018 Shareholder Has Standing to Sue Corporation's Counsel for Malpractice
On September 20, 2018, Justice Sherwood of the New York County Commercial Division issued a decision… Read More
September 20, 2018 Court Declines to Dismiss Double-Derivative Action
On September 4, 2018, Justice Scarpulla of the New York County Commercial Division issued a decision… Read More
September 17, 2018 Shareholder Need Not Hold Share Certificates to Have Right to Assert Derivative Claims
On September 5, 2018, Justice Bransten of the New York County Commercial Division issued a decision … Read More
July 12, 2018 Derivative Claims Fail for Failure Adequately to Plead Demand Futility
On July 5, 2018, the First Department issued a decision in Epstein v. Ruane, Cunniff & Goldfarb Inc.… Read More
June 8, 2018 Fraud Claim Dismissed; Claim Was Derivative, Not Direct
On May 30, 2018, Justice Masley of the New York County Commercial Division issued a decision in Khan… Read More
May 20, 2018 Derivative Action Dismissed for Failure to Plead Demand or Demand Futility
On May 9, 2018, Justice Sherwood of the New York County Commercial Division issued a decision in Gla… Read More
March 22, 2018 Estate of Deceased LLC Member Lacked Standing to Bring Derivative Claims
On February 22, 2018, Justice Scarpulla of the New York County Commercial Division issued a decision… Read More
February 21, 2018 Derivative Action Dismissed for Failure to Plead Demand Futility With Particularity
On February 13, 2018, the First Department issued a decision in Retirement Plan for Gen. Empls. of t… Read More
December 11, 2017 Derivative Action Plaintiff Loses Standing--And Action Must Be Dismissed--If It Sells Its Ownership Interest
On December 6, 2017, the Second Department issued a decision in Jacobs v. Cartalemi, 2017 NY Slip Op… Read More
December 8, 2017 50% Shareholder Must Bring Derivative Action, Not Action in Name of Corporation, Against Other 50% Shareholder
On November 9, 2017, Justice Ramos of the New York County Commercial Division issued a decision in U… Read More
December 5, 2017 Plaintiff Without Standing to Bring Derivative Action Not Entitled to Fee Award Under BCL Sec. 626
On November 29, 2017, the Second Department issued a decision in Sakow v. Waldman, 2017 NY Slip Op. … Read More
July 2, 2017 Complaint Dismissed for Impermissibly Mixing Direct and Derivative Claims
On June 15, 2017, Justice Knipel of the Kings County Commercial Division issued a decision in Guindi… Read More
June 3, 2017 Derivative Claims Fail; Alleged Individual Harm Embedded in Harm to Corporation
On May 24, 2017, the Second Department issued a decision in Patterson v. Calogero, 2017 NY Slip Op. … Read More
May 26, 2017 Trustee Lacked Standing to Bring Derivative Action on Behalf of Trust
On May 2, 2017, Justice Kornreich of the New York County Commercial Division issued a decision in 19… Read More
April 20, 2017 Plaintiff Lacked Standing to Bring Derivative Claims on Behalf of LLC
On April 12, 2017, Justice Oing of the New York County Commercial Division issued a decision in Poko… Read More
January 27, 2017 Derivative Action Dismissed; Demand Insufficient and Futility Not Shown (New York Count
On January 17, 2017, Justice Singh of the New York County Commercial Division issued a decision in S… Read More
December 5, 2016 First Department Reverses Trial Court Approval of Derivative Action Settlement
On November 29, 2016, the First Department issued a decision in Company v. Clayton Dubilier & Rice, … Read More
November 30, 2016 Board Did Not Breach Fiduciary Duty By Entering Into Management Contract With Former Employees
On November 22, 2016, the First Department issued a decision in Doppelt v. Denahan, 2016 NY Slip Op.… Read More
October 29, 2016 Family Relationship of Majority of Managers Does Not Excuse Demand in Derivative Suit
On October 11, 2016, Justice Scarpulla of the New York County Commercial Division issued a decision … Read More
October 11, 2016 Demand Futility Allegations in Amended Complaint Judged Based on Facts at Time of Amendment
On October 4, 2016, the First Department issued a decision in Korsinsky v. Winkelreid, 2016 NY Slip … Read More
July 17, 2016 Assignee of LLC Membership Interest Lacked Standing to Bring Derivative Action
On June 24, 2016, Justice Scarpulla of the New York County Commercial Division issued a decision in … Read More
July 10, 2016 Derivative Complaint Dismissed for Failure Adequately to Allege Demand Futility
On June 27, 2016, Justice Ash of the Kings County Commercial Division issued a decision in Guzman v.… Read More
June 1, 2016 Pre-Suit Demand Without Opportunity to Investigate Insufficient in Derivative Action
On May 31, 2016, the First Department issued a decision in Culligan Soft Water Co. v. Clayton Dubili… Read More
March 15, 2016 Plaintiff Allowed to Replead Derivative Claims Against Directors to Show Discrimination
On March 10, 2016, the First Department issued a decision in Davis v. Scottish Re Group Ltd., 2016 N… Read More
February 3, 2016 Arbitrary Decisions Not Covered by the Business Judgment Rule
On January 21, 2016, the First Department issued a decision in Tsui v. Chou, 2016 NY Slip Op. 00428,… Read More
January 24, 2016 When a Majority of Directors in Derivative Action Are Independent, Demand is Not Excused
On January 14, 2016, the First Department issued a decision in Wandel v. Dimon, 2016 NY Slip Op. 002… Read More
November 11, 2015 Action Asserting Derivative Claims Directly Dismissed for Lack of Standing
On November 6, 2015, Justice Ramos of the New York County Commercial Division issued a decision in H… Read More
October 30, 2015 Court Blasts Derivative Class Action Settlement
On October 23, 2015, Justice Ramos of the New York County Commercial Division issued a decision in M… Read More
October 8, 2015 Claims Direct, Not Derivative, Because Harm Alleged and Relief Sought Were to Plaintiffs
On October 6, 2015, the First Department issued a decision in SFR Holdings Ltd. v. Rice, 2015 NY Sli… Read More
July 26, 2015 Plaintiff Must Nullify Cancellation Before Bringing A Derivative Action On Behalf Of A Defunct Delaware LLC
On July 6, 2015, Justice Oing of the New York County Commercial Division issued a decision in Meissn… Read More
April 5, 2015 First Department Examines Demand Futility
On April 2, 2015, the First Department issued a decision in Bodner v. Grunstein, 2015 NY Slip Op. 02… Read More
February 5, 2015 Damages in Derivative Action Must go to Corporation, Not Plaintiff
On January 28, 2015, the Second Department issued a decision in Sakow v. Waldman, 2015 NY Slip Op. 0… Read More
January 19, 2015 Shareholder Has Standing to Assert Unjust Enrichment Claim
On January 13, 2015, the First Department issued a decision in Scott v. Pro Management Services Grou… Read More
January 5, 2015 Court Refuses to Disqualify Counsel from Defending Both the Nominal Defendant and Other Defendants in a Derivative Action
On December 30, 2014, the First Department issued a decision in Stilwell Value Partners IV, L.P. v. … Read More
October 15, 2014 Action for Corporate Waste Cannot be Brought Against the Former Sole Owner of a Company
On October 14, 2014, Justice Demarest of the Kings County Commercial Division issued a decision in K… Read More
October 11, 2014 First Department Discusses Differences Between Direct and Derivative Claims
On September 30, 2014, the First Department issued a decision in Serino v. Lipper, 2014 NY Slip Op. … Read More
July 23, 2014 Commercial Division Applies Delaware Demand Futility Pleading Rules
On July 3, 2014, Justice Schweitzer of the New York County Commercial Division issued a decision in … Read More
July 20, 2014 Double Derivative Claim Dismissed For Failure to Show Control of Subsidiary
On July 9, 2014, Justice Schweitzer of the New York County Commercial Division issued a decision in … Read More
June 4, 2014 Notwithstanding Internal Affairs Doctrine, Some Claims in Derivative Action Governed by New York Law
On June 3, 2014, the First Department issued a decision in Culligan Soft Water Co. v. Clayton Dubil… Read More
May 29, 2014 Unit Owners’ Vote Insulates Condominium Board from Derivative Action
On May 16, 2014, Justice Scarpulla of the New York County Commercial Division issued a decision in D… Read More
May 23, 2014 Organization State Law Determines Whether Derivative Action Plaintiff is Entitled to Discovery on Demand Refusal
On May 22, 2014, the First Department issued a decision in Lerner v. Prince, 2014 NY Slip Op. 03763,… Read More
April 11, 2014 Settlement of Federal Derivative Action Bars State Court Plaintiff’s Derivative Action
On April 1, 2014, Justice Lowe (formerly of the New York County Commercial Division and now Presidin… Read More
February 1, 2014 Derivative Action Dismissed for Failure Adequately to Plead Demand Futility
On January 21, 2014, Justice Kapnick of the New York County Commercial Division issued a decision i… Read More
January 12, 2014 Derivative Claim Dismissed for Failure to Allege Demand Futility with Particularity
On January 6, 2014, Justice Bransten of the New York County Commercial Division issued a decision in… Read More
January 4, 2014 Appropriate Vehicle to Address Grievances In Two-Shareholder Corporations is Derivative Action
On December 20, 2013, Justice Demarest of the Kings County Commercial Division issued a decision in … Read More
November 13, 2013 New York Shareholder Derivative Plaintiffs Must Plead With Particularity Why Board's Failure to Comply With Pre-Suit Demand Was Improper
On November 8, 2013, Justice Bransten of the New York County Commercial Division issued a decision i… Read More