Chancery Court Dismisses Derivative Action Alleging Caremark Claims
By: Scott Waxman and Zane Madden
In In re Lendingclub Corp. Derivative Litigation, C.A. No. 12984-VCM (Del. Ch. October 31, 2019), the Delaware Court of Chancery (the “Court”) granted the defendants’ motion to dismiss the plaintiffs’ consolidated supplemented complaint (the “complaint”) for failure to adequately plead demand futility. After analyzing the allegations in the complaint, the Court concluded that plaintiffs’ claims failed because the facts alleged did not demonstrate at the dismissal stage that a majority of the board of directors (the “Board”) could exercise independent and disinterested judgment with regard to a litigation demand as required under In re Caremark Int’l Inc. Deriv. Litig., 698 A.2d 959 (Del. Ch. 1996).
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