Posts Categorized: Derivative Actions

Posted: 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 Pokoik v. Norsel Realties, 2017 NY Slip Op. 50459(U), dismissing claims as derivative claims on behalf of an LLC that the plaintiffs lacked standing to bring. First, Justice Oing held that the plaintiffs’ claims were derivative, rather than... Read more »

Posted: 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 Sims v. Firstservice Corp., 2017 NY Slip Op. 30104(U), dismissing a derivative action for lack sufficient allegations of demand, explaining: The demand requirement rests on the basic principle of corporate governance that the decisions of a corporation –... Read more »

Posted: 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, LLC, 2016 NY Slip Op. 08021, reversing the approval of the settlement of a derivative action, explaining: The settlement does not provide for payment to the company. Plaintiffs are to receive the bulk of the $4 million settlement... Read more »

Posted: 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. 07868, holding that directors did not breach their fiduciary duty by entering into a management contract with former employees, explaining: Contrary to the argument advanced by plaintiff, a shareholder who seeks to bring a derivative action on... Read more »

Posted: 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 in Danial v. Monasebian, 2016 NY Slip Op. 31909(U), holding that a family relationship among managers did not excuse demand in a derivative action, explaining: Demand is deemed futile and thus excused in the following three situations when alleged... Read more »

Posted: 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 Op. 06454, holding that demand futility allegations in an amended complaint are based on the facts at the time of amendment, explaining: In this purported derivative action challenging the valuation of the nominal defendant’s compensatory stock options, the... Read more »

Posted: 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. Kordonsky, 2016 NY Slip Op. 31208(U), dismissing a complaint for failure adequately to allege demand futility. In Guzman, the plaintiff shareholders in a black car service brought a derivative action alleging that the president of the service... Read more »