These record settlements in shareholder
derivative actions increase the potential liability for directors and officers.
transplanted
derivative action lay moribund for almost four post-war decades while at the same time the
derivative action was a staple of shareholder litigation in the United States.
Courts developed the
derivative action to fill a void they saw in
The statutory requirements for the appointment of the reviewer are straightforward, but for two issues: 1) the independence requirement discussed below; and 2) whether the independent investigator can be a sitting member of the board of directors of the corporation on whose behalf the
derivative action is brought.
But the most prevalent kind of D&O claim activity arising from these practices, however, has been shareholder
derivative actions.
The Delaware Court of Chancery dismissed the claims, holding that plaintiffs were precluded from pursuing their derivative claims in Delaware because similar claims had already been dismissed by a federal court in New York in an earlier-filed
derivative action on the ground that the New York plaintiffs failed to make a pre-suit demand or allege demand futility with the particularity required by Delaware law an action Weil also won, both in the Southern District of New York and the Second Circuit Court of Appeals.
Schweitzer, relied on a forum selection provision in Fairway s certificate of incorporation making the Delaware Court of Chancery the exclusive forum for
derivative actions and other actions involving the internal affairs of Delaware corporations.
