From our private database of 33,800+ case briefs...
Beam v. Stewart
Delaware Court of Chancery
833 A.2d 961 (2003)
Shareholder Monica Beam (plaintiff) brought a derivative action against Martha Stewart, her company Martha Stewart Living OmniMedia, Inc. (MSO), and its other directors (defendants) without making a demand on the board or requesting books and records. Beam alleged Stewart breached fiduciary duties to MSO and its shareholders by engaging in insider trading and making public statements about the transaction. Stewart was indicted for selling her shares in a pharmaceutical company the day before negative information about its anticipated cancer drug became public. After two months of adverse publicity on Stewart, MSO’s stock price dropped substantially. When Beam sued, MSO had six directors including Stewart. The second was Stewart’s close, longtime personal friend Sharon Patrick, MSO’s president and chief operating officer. Beam claimed three of the four outside directors also had close enough personal ties to Stewart to inappropriately sway their judgment. However, Beam relied almost entirely on media articles to show those ties. Articles reported that the third and fourth directors were Stewart’s longtime friends and one had attended the same wedding reception as Stewart. The fifth director had contacted a newspaper on Stewart’s behalf about an unflattering biography of Stewart the newspaper planned to publish. Finally, all the directors were paid for serving on the board at least partially in voting stock and received stock options. The directors moved to dismiss for failure to either make a demand on the board or adequately plead demand futility.
Rule of Law
Holding and Reasoning (Chandler, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 607,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 607,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 33,800 briefs, keyed to 984 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.