Keywords
Demand Futility, Shareholder Suit, Shareholder Divestment, Mergers
Abstract
This Article diagnoses, and seeks to cure, an undertheorized dynamic relationship between two levers of shareholder influence in the modern public corporation: suit and voice. This Article demonstrates that, under current Delaware law, a shareholder must stifle its voice in order to retain the ability to pursue a viable derivative claim, thus inhibiting the shareholder’s monitoring and information-sharing roles. In particular, the onerous “demand made” litigation pathway disincentivizes pre-suit demand, and the expansive definition of pre-suit demand captures shareholder communications to the board seeking corrective action other than litigation. To avoid this collision between suit and voice, this Article proposes a narrowed definition of pre-suit demand, which furthers the policy rationales underlying the pre-suit demand requirement without stifling shareholder voice.
Recommended Citation
31 Fordham J. Corp. Fin. L. 181 (2025).
Included in
Banking and Finance Law Commons, Business Organizations Law Commons, Courts Commons, Litigation Commons