Author granted license

Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International

Document Type


Publication Date

Fall 1983




Hofstra University School of Law




This article examines the demand shareholders must make on a corporation's board of directors prior to bringing a derivative suit. ... Presented with the question of whether the court would give effect to a decision of a committee of disinterested directors to terminate a shareholder derivative suit alleging directors' breach of fiduciary duties, the court ruled that even if the special committee was truly disinterested and independent, "[t]he Court should determine, applying its own independent business judgment, whether the [corporation's] motion [to dismiss the derivative action] should be granted." ... A derivative suit is one of the means for conducting a thorough investigation of corporate management. ... THE DEMAND REQUIREMENT AND SECTION 36 OF THE INVESTMENT COMPANY ACT ... The majority's statement implies that, consistent with federal policies, a court may terminate a derivative suit based on the ICA if this standard is not met



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.