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Delaware Reverses Shareholder-Derivative Suit Ruling

A ruling that had been criticized for making it overly difficult for companies to dismiss shareholder derivative lawsuits—cases in which shareholders sue a company’s board members for harm those directors allegedly caused the corporation— has been overturned by the Delaware Supreme Court.

So reports Thomson Reuters.

The lower court’s ruling had allowed shareholders to pursue a derivative lawsuit against Allergan's board for allegedly misbranding the company’s Botox treatment despite the fact that a California court had already dismissed the same case. The Delaware Supreme Court decision to overturn it was based on holdings providing that the dismissal of a derivative lawsuit by one court prevents other shareholders from bringing the same case somewhere else.

Read the full article from Thomson Reuters here.

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