An attorney representing former shareholders of Countrywide Financial Corp. told the Delaware Supreme Court that it should create a new label for shareholder claims in situations where a board's fraud resulted in a hastily conceived merger so that his clients can pursue their claims against the former mortgage giant's directors in a California federal court. Countrywide's attorney countered, telling the court that the shareholders' claim is purely a derivative one and there is no basis in Delaware law for the high court to create a new claim, which was dubbed a "quasi-derivative claim."
The attorneys debated the issue last week during oral arguments before the Delaware Supreme Court in Arkansas Teacher Retirement System v. Mozilo.
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