Justice Eileen Bransten
In a shareholder derivative action, plaintiff International Painters and Allied Trades Industry Pension Fund sued on behalf of nominal defendant BGC Partners Inc. (BGCP), asserting breach of fiduciary duty and unjust enrichment that stem from three transactions entered into by BGCP’s board of directors. Defendant Cantor Fitzgerald and others moved to dismiss for failure to plead demand futility and failure to state a cause of action against the outside directors. Plaintiff argues each of the three challenged board actions are related-party transactions governed by the entire fairness doctrine. The court rejected this argument and granted defendants’ motion to dismiss. It agreed with the outside directors that the breach of fiduciary duty action fails to state a claim. While plaintiff baldly asserted that the outside directors’ bad faith is manifest in their approval of the related-party transactions, plaintiff pointed to no particularized pleading that outside directors acted with an intent to harm BGCP or intentionally shirked their duties. Plaintiff pleaded a disagreement with the decisions made by the board, which is insufficient to plead either bad faith or breach of the duty of loyalty.
