The predominant approach in most jurisdictions to determine whether the dismissal of a derivative action based on the failure to adequately plead demand futility bars re-litigation of this issue in a subsequent derivative action brought by a different stockholder plaintiff is to apply the traditional legal test for issue preclusion. Generally in these jurisdictions, issue preclusion bars re-litigation of demand futility if: the demand-futility issue is the same; the issue is actually litigated and necessary to a final judgment; it involves the same parties in the prior derivative action or in privity with those parties; and there is adequate representation of counsel in the prior derivative action.
*May exclude premium content
Already have an account? Sign In Now
Interested in customizing your subscription with Law.com All Access?
Contact our Sales Professionals at 1-855-808-4530 or send an email to email@example.com to learn more.