Header graphic for print
NY Commercial Case Compendium A Searchable Database of Court Decisions Issued by New York’s Commercial Division

Category Archives: Demand Futility Doctrine

Subscribe to Demand Futility Doctrine RSS Feed

Derivative Complaint Dismissed for Failure to Make Demand on Board of Directors or to Show Demand Futility

Posted in CPLR 3211, Demand Futility Doctrine, Derivative Actions, Industry: pharmaceutical, Justice Emerson, Elizabeth, Suffolk

In a June 17, 2014 Commercial Division decision by Justice Emerson, the court dismissed an amended complaint bringing derivative claims for failure to make a demand on the board of directors before commencing the action or showing that such a demand would be futile.  Applying Delaware law, the court found that the allegations in the… Continue Reading

Court Dismisses Suit Against J.P. Morgan Chase Board for Failure to Make Pre-suit Demand or Demonstrate Demand Futility

Posted in Breach of Fiduciary Duty, Business Judgment Rule, Collateral Estoppel, CPLR 3211, Demand Futility Doctrine, Derivative Actions, Fiduciary Duty, Industry: financial services, Justice Ramos, Charles E., Motion to Dismiss, New York

In a March 28, 2014 Commercial Division decision by Justice Ramos, the court dismissed a shareholder derivative complaint for failing to make a pre-litigation demand to the sitting board of directors to bring the lawsuit and for failing to plead facts sufficient to demonstrate that such a demand would be futile. The litigation was predicated… Continue Reading

Court Dismisses Five of Six Claims in Stepmom vs. Stepchildren Suit Related to Control of Kensington Publishing Corp.

Posted in Accounting, Breach of Contract, Breach of Fiduciary Duty, CPLR 3211, Declaratory Judgment, Demand Futility Doctrine, Industry: Publishing, Justice Bransten, Eileen, Motion to Dismiss, New York

In a January 6, 2013 decision by Justice Bransten, the court granted the defendants’ motion to dismiss the complaint as to five of its six causes of action. This case involved a dispute as to the control of the defendant corporation, Kensington Publishing (“Kensington”), the largest independent-publisher of mass-market books in the United States. At… Continue Reading

Plaintiffs Fail to Adequately Plead Demand Futility for Derivative Action On Behalf of GE

Posted in CPLR 3211, Demand Futility Doctrine, Derivative Actions, Discovery, Documentary Evidence, Industry: financial services, Industry: manufacturing, Justice Bransten, Eileen, Motion to Dismiss, New York

In a November 7, 2013 decision by Justice Bransten the court dismissed a consolidated shareholders derivative action brought in the name of General Electric.  The court found that the plaintiffs did not sufficiently particularize their allegations that the directors who decided not to pursue the litigation lacked independence or were not disinterested.  The court further… Continue Reading

Plaintiffs Fail to Allege Particularized Facts Sufficient to Establish Demand Futility in Derivative Action: Matter of FalconStor Software, Inc.

Posted in Business Judgment Rule, CPLR 3211, Demand Futility Doctrine, Industry: technology, Justice Pines, Emily, Motion to Dismiss, Suffolk

In a March 5, 2013, decision by Justice Pines, the court dismissed plaintiff-shareholders’ derivative action  against the board of directors of a software company for failure to plead demand futility with sufficient particularity under Delaware law.  Plaintiffs’ action arose out of a deferred-prosecution agreement and consent judgment in which it was admitted that company employees… Continue Reading

Failure to Comply with Notice Requirement in Agreement’s No-Action Clause Warrants Dismissal of Complaint: Walnut Place LLC v Countrywide Home Loans, Inc.

Posted in Breach of Contract, CPLR 3211, Demand Futility Doctrine, Derivative Actions, Industry: banking, Industry: financial services, Industry: real estate, Justice Kapnick, Barbara R., Mortgages, New York, Special Proceeding, Standing

In a March 28, 2012, decision by Justice Kapnick, the court granted defendants’ motion to dismiss. Plaintiff-investors brought suit derivatively on behalf of two securitization trusts holding certain mortgage-backed securities against defendant-lenders alleging breach of the agreements governing the administration of the mortgage loans sold by defendants. Defendants moved to dismiss the complaint contending that plaintiffs were… Continue Reading

Derivative Claims Brought on Behalf of an LLC Cannot Be Intermingled with Individual Claims: Waxman Real Estate LLC v Sacks

Posted in Breach of Contract, Breach of Fiduciary Duty, Compel Arbitration, CPLR 3016, CPLR 3211, CPLR 6301, CPLR 7503, Demand Futility Doctrine, Derivative Actions, Fraud, Industry: real estate, Justice Fried, Bernard J., Limited Liability Companies, LLCL 409, LLCL 414, Motion to Dismiss, New York, Unjust Enrichment

In a September 7, 2011, decision by Justice Fried, the court granted in part defendant-LLC members’ motion to dismiss and denied their motion to compel arbitration. The court also denied plaintiff-investors’ cross-motion for injunctive relief under CPLR 6301, as well as for an order under LLCL 414, removing the defendants from a real estate investment company. In… Continue Reading

Affiant’s Health Issues at the Time of Original Dismissal Motion Justify Submission of Evidence of Lack of Standing on Later Renewal Motion: Koenig v Koenig

Posted in BCL 1104, BCL 626, Breach of Fiduciary Duty, CPLR 1206, CPLR 2221, CPLR 3211, Deadlock, Demand Futility Doctrine, Derivative Actions, Dissolution, Industry: technology, Justice Driscoll, Timothy, Motion to Dismiss, Motion to Reargue, Motion to Renew, Nassau, Receivership

In a September 17, 2010, decision by Justice Driscoll in connection with a post-dissolution derivative action on behalf of a microscope-servicing company, and on defendant’s motion for leave to renew his motion to dismiss for lack of standing based on an affidavit from the company’s receiver affirming that plaintiff failed to make a demand on… Continue Reading

Pre-Suit Demand in Derivative Action Not Met: Security Police & Fire Professionals of Am. Retirement Fund v Mack

Posted in Business Judgment Rule, Demand Futility Doctrine, Derivative Actions, Duty of Loyalty, Fiduciary Duty, Industry: financial services, Justice Kornreich, Shirley Werner, New York, Unjust Enrichment, Waste

In a December 9, 2010 decision by Justice Kornreich, the Court dismissed a derivative action brought by shareholders of Morgan Stanley, against Morgan Stanley and its executive officers and directors. The complaint sought damages for compensation that Morgan Stanley paid and planned to pay its employees from the years 2006, 2007 and 2009. Plaintiffs alleged claims of… Continue Reading

Bohigan v Pearson, Sup Ct, New York County, October 15, 2010, Schweitzer, J., Index No. 650149/10

Posted in Breach of Fiduciary Duty, CPLR 3211, Demand Futility Doctrine, Derivative Actions, Industry: financial services, Justice Schweitzer, Melvin L., Motion to Dismiss, New York, Unjust Enrichment

In an October 15, 2010, decision by Justice Schweitzer in connection with a shareholder derivative action brought by plaintiff-shareholder on behalf of an asset-management company against its board of directors alleging an improper accounting of the company’s investments, and on defendants’ motion to dismiss for failure to state a cause of action and failure to… Continue Reading