Zapata Corp. v. Maldonado
Delaware Supreme Court
430 A.2d 779 (1981)
- Written by Max Milstein, JD
Facts
William Maldonado (plaintiff), a shareholder in Zapata Corporation (defendant), brought a derivative action on behalf of Zapata against 10 of Zapata's officers and directors, alleging breach of fiduciary duty. Maldonado had not made a prior demand that the board bring the action and instead argued that demand was futile, because all of the board members were named defendants who allegedly took part in the challenged transactions. After two new outside directors were added to the board, the board as a whole appointed only those two new directors to an investigation committee charged with investigating Maldonado’s claims. The committee found that it was in Zapata’s best interest that Maldonado's derivative suit be dismissed. The chancery court denied Zapata's motion to dismiss or for summary judgment, and Zapata filed an interlocutory appeal to the Delaware Supreme Court.
Rule of Law
Issue
Holding and Reasoning (Quillen, J.)
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