Justice Eileen Bransten
Defendants moved to dismiss the shareholder derivative claims brought by plaintiffs, GE shareholders Kenney and Raul, on behalf of nominal defendant General Electric Company (GE). The plaintiffs’ consolidated complaint alleged breach of fiduciary duties, waste of corporate assets and unjust enrichment, and sought indemnification and contribution from defendants as to any claims asserted against GE. Defendants sought to dismiss under §§3211(a)(1), (a)(3), and (a)(7) of the New York Civil Practice Law and Rules (CPLR), arguing plaintiffs’ allegations did not satisfy the demand requirement of New York Business Corporation Law (BCL) §626(c), that plaintiffs are not entitled to discovery prior to this motion to dismiss being decided, and that under BCL 626(b), plaintiff Raul lacks standing with respect to conduct that occurred prior to his becoming a GE shareholder. The court granted defendants’ motion to dismiss with respect to CPLR 3211(a)(7) and (a)(3). It determined plaintiffs failed to plead with sufficient particularity that the demand set forth in the Confirmatory Demand Letter was made upon the Board, such that the Consolidated Complaint is dismissed to the extent it relies upon the Confirmatory Demand Letter.
