Director Independence to Consider Pre-Suit Demand

In a decision written by Chief Justice Leo E. Strine Jr., for the second time in 15 months, the Delaware Supreme Court reversed a Court of Chancery decision dismissing a derivative complaint for failure to plead demand excusal.

23 minute read April 02, 2017 at 12:04 AM
By
Joseph M. McLaughlin and Yafit Cohn
Director Independence to Consider Pre-Suit Demand

Universally known as the demand requirement, Delaware Chancery Rule 23.1 compels dismissal of any shareholder derivative complaint that does not allege with particularity the efforts taken by the plaintiff to demand the desired action by the board or, alternatively, facts explaining that a demand was not made because it would have been futile.

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