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Case Law Summaries

Delaware – Derivative Suit

DelawareMcElrath v. Kalanick, No. 181, 2019, decided January 13, 2020. The Delaware Supreme Court affirmed the Chancery Court’s dismissal of a derivative suit against a corporation’s board of directors for failure to make a pre-suit demand or allege demand futility. The suit arose out of the board’s approval of a risky acquisition that resulted in the corporation using another company’s proprietary information. The court found that a majority of the directors were independent and disinterested and the complaint failed to allege that the board rubberstamped the flawed transaction or acted in bad faith.

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