The Delaware Supreme Court will decide whether stockholders seeking to bring a derivative lawsuit have a due process right to re-litigate the issue of demand futility, notwithstanding another court’s prior dismissal of an action for failure to sufficiently plead demand futility.
The U.S. Chamber and Retail Litigation Center, Inc. filed an amicus brief explaining that a right to re-litigate demand futility would increase the high costs of derivative litigation and infringe on Boards’ management rights. Further, the Court of Chancery’s recommended approach would not solve the “fast-filer” problem and is not necessary to address that legitimate concern.
Amanda F. Davidoff, Judson O. Littleton, and Lee J.F. Deppermann of Sullivan & Cromwell LLP and Kathleen St. J. McCormick and Nicholas J. Rohrer of Young Conaway Stargatt & Taylor, LLP served as co-counsel for the U.S. Chamber of Commerce on behalf of the U.S. Chamber Litigation Center.
