Defense Victory: Granted: C&J’s Motion To Dismiss Shareholder Derivative Claims With Prejudice

Call & Jensen attorneys recently obtained a complete dismissal with prejudice of all shareholder derivative claims in a business dispute in federal court. Last year, a closely held corporation filed a lawsuit against its former CEO, alleging fraud and misappropriation of millions of dollars. The defendant countered with shareholder derivative claims against the corporation’s Chairman of the Board and Chief Financial Officer. Representing these individual counter-defendants, Call & Jensen attacked the derivative claims, arguing they failed to state any valid claims. Agreeing, the Court dismissed the claims, but afforded the defendant “one final opportunity” to amend. When the defendant tried to allege the derivative claims again, Call & Jensen promptly persuaded the Court that the claims were still invalid. The Court dismissed all the derivative claims with prejudice, thereby removing the board chairman and CFO from the suit. This case was litigated by Matthew R. Orr, William P. Cole, L. Lisa Sandoval, and Jeffrey M. David.