A shareholder has won the right to bring a multimillion-dollar derivative action on behalf of the limited liability company that distributes Boar’s Head delicatessen products.
Southern District Judge Denny Chin, in Bischoff v. Boar’s Head Provisions Co. Inc., 06 Civ. 106, noted that New York federal courts have in the past permitted derivative suits on behalf of New York limited liability companies under common law, despite the absence of explicit statutory authority. As a result, he held that shareholder Eric Bischoff could sue the controlling members and managers of the Frank Brunckhorst Co., the distributor, for diverting millions in profits to Boar’s Head.
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