Facts
Beam was a shareholder of Martha Stewart Living Omnimedia. Beam brought a derivative action.
Procedural History
Defendants sought to dismiss the Complaint for failure to comply with the demand requirement and for failure to adequately plead demand excusal.
Issue(s)
Did the Complaint fail to adequately plead why demand would be futile?
Holding(s)
Yes.
Reasoning/Analysis
The Court found that Count I alleges that Stewart breached her fiduciary duties. Because this does not challenge an action by the Board, the appropriate test is whether the particularized allegations create a reasonable doubt that, as of the time the complaint was filed, the Board could have properly exercised its independent judgment and disinterested business judgment in responding to a demand. Beam offers various theories but fails to plead sufficient facts that could permit the Court to reasonably infer that one or more of the theories could be accurate.
Judgment/Outcome
The Court dismissed the Complaint.
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