The Delaware Court of Chancery just issued possibly the most important decision in the last 10 years on derivative claims. InLouisiana Municipal Police Employees’ Retirement System v. Pyott , Del. Ch. Ct. 5795-VCL (June 11, 2012), the court clarified when a previously dismissed derivative suit may be refiled and what plaintiffs should do to properly satisfy the requirement that individual stockholder plaintiffs adequately allege why they, rather than a corporation’s board of directors, should control derivative claims brought on behalf of the corporation. Because derivative litigation is a principal tool to ensure proper corporate governance, this decision has large implications.
Background to the Decision
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