Court Of Chancery Establishes Law On Double Derivative Litigation
This is an important decision dealing with the often confusing law on double derivative suits. Briefly, the decision holds: (1) there is no need for there to be jurisdiction over a parent in a double derivative suit when there is jurisdiction over the Delaware subsidiary; (2) demand futility is measured at the parent level and (3) there is a derivative claim for the breach of duties owed to the subsidiary. This last point is worth closer examination as the board of a subsidiary may act at the direction of its parent without liability. Here some very odd facts lead to this result.