I blogged yesterday about United Food and Commercial Workers Union v. Zuckerberg, et al., No. 2018-0671-JTL, 2021 WL _______ (Sep. 23, 2021), in which the Delaware Supreme Court established a new standard for deciding whether demand is excused in derivative litigation. It's a long post, which situates the case in its context.
The Chancery Daily immediately blasted out a note about the case to its email subscribers. I suspect a longer form analysis of the case will be forthcoming. In the meanwhile, I note TCD's closing observation:
TCD notes that, earlier this week, the Supreme Court overruled John A. Gentile, et al. v. Pasquale David Rossette, et al., No. 573, 2005, opinion (Del. Aug. 17, 2006), which recognized dual-natured direct and derivative claims for “corporate-overpayment-to-a-controlling-stockholder,” finding that under Patrick Tooley, et al. v. Donaldson, Lufkin & Jenrette, Inc., et al., No. 84, 2003, opinion (Del. Apr. 2, 2004), claims for overpayment or dilution are solely derivative. The Chancery Salvo - Monday, September 20, 2021. TCD can confidently say that the week of September 20, 2021 has been the most significant during its publication lifetime in terms of the development of Delaware law governing stockholder assertion of claims on behalf of a corporation during its publication lifetime, and sympathizes with its many subscribers who are corporate law professors to the extent they are teaching corporate law this semester and suddenly find themselves having to modify lesson plans and syllabi -- presumably this happened well before you reached derivative claims, so at least there’s some runway.
FWIW, I regard The Chancery Daily as essential reading for anyone with an interest in corporate law and governance. I strongly encourage you to subscribe.
