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Zapata Corp. v. Maldonado

Delaware Supreme Court
430 A.2d 779 (1981)


William Maldonado (plaintiff) brought a derivative action on behalf of Zapata Corp. (defendant) against Zapata’s board of directors, alleging breach of fiduciary duty. Maldonado had not made a prior demand on the board and instead argued that demand was futile, because all of the board members were alleged to have taken part in the challenged transactions. After two new outside directors were added to the board, the board as a whole appointed those two members to an investigation committee charged with investigating Maldonado’s claims. The committee found that it was in Zapata’s best interest that the derivative suit be dismissed. The chancery court ruled that the board could not dismiss the case on its own determination, and Zapata appealed.

Rule of Law


Holding and Reasoning (Quillen, J.)

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