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Joseph M. McLaughlin, a partner at Simpson Thacher & Bartlett, writes that if a shareholder plaintiff fails to make demand on a corporation's directors prior to filing a derivative action, it must allege why demand would have been futile. If the issue of demand futility is decided against that plaintiff, are others who seek to pursue derivative claims precluded from relitigating the issue? As recent case law demonstrates, the answer may depend on the jurisdiction in which the first suit is litigated.
October 11, 2007 at 12:00 AM
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