The Viability of Dually Direct and Derivative Claims Is Under Fire in Delaware Corporate Litigation
By: Marc Casarino
The business and affairs of a Delaware corporation are managed by its board of directors. The board’s managerial oversight includes deciding whether to pursue a claim belonging to the corporation. A stockholder may demand that the board pursue a claim on behalf of the corporation. By doing so, the stockholder concedes the board’s capacity to properly evaluate pursuit of the claim. Delaware courts defer to the business judgment of the board in such circumstances, and therefore it is very difficult for a stockholder to successfully challenge a board’s decision not to pursue the claim. (more…)