Futility Excuses Early Demand to the Board
A shareholder filed a derivative action on behalf of a corporation against its current and former officers and directors alleging breach of fiduciary duty and waste of corporate assets. The lower court dismissed the case but the New York Appellate Court reversed on multiple grounds including lack of standing. It found the shareholder's failure to comply with the judicial-permission requirement did not bar the derivative action. Further, the shareholder established the futility of making a pre-suit demand to the board, so he was excused from doing so. The court also ruled the trial court did not abuse its discretion in determining the corporation was not entitled to dismissal on the additional ground of forum non conveniens.