The Dog That Didn’t Bark: Court of Chancery Decision Reaffirms the Strength of the Demand Futility Standard
In July, in Vladimir Gusinsky Revocable Tr. v. Hayes, No. CV 2022‑1124‑MTZ (July 23, 2024), Vice Chancellor Zurn issued an opinion reiterating the high bar a plaintiff must overcome to excuse demand.
Chancery Court Reminds Bricklayers of Sturdy Foundation Required to Plead Demand Futility for Caremark Claims
Last month, in Bricklayers Pension Fund of Western Pennsylvania v. Brinkley, Delaware’s Court of Chancery dismissed a stockholder plaintiff’s derivative suit against the directors and officers of Centene Corporation for purported breaches of fiduciary duty in connection with their oversight of company compliance with Medicaid laws and regulations. The Court concluded that the plaintiff failed to establish demand futility pursuant to Court of Chancery Rule 23.1. Put another way, the plaintiff failed to demonstrate that it had standing to pursue claims on behalf of Centene.
A Judicial Notice That Judicial Notice Has Its Limits
In a significant decision the week before the Christmas holiday, the Delaware Supreme Court, sitting en banc, reversed the Delaware Court of Chancery’s dismissal of Lebanon County Employees’ Retirement Fund v. Collis et al. (“Lebanon”), reinstating stockholder derivative claims against the directors of AmerisourceBergen Corporation arising out of the Company’s wholesale distribution of prescription opioids in the United States. Interested readers can view our blog’s prior discussion of the Court of Chancery’s dismissal here.