North Carolina Business Litigation Report

Greene v. Shoemaker, 1998 NCBC 4 (N.C. Super. Ct. Sept. 24, 1998)(Tennille)

The Court discussed the sufficiency of and underlying reasons for a demand by a derivative action plaintiff, and found that its demand was insufficient. Among other things, "the demand requirement reinforces the basic norms of corporate governance by protecting the ability of the directors to make a business judgment about what is in the best interest of the corporation and all of its shareholders."

Although plaintiff had made a written demand, it made claims in its complaint which were not asserted in its demand letter and it had not waited for the statutory period before filing.

North Carolina's Legislature has eliminated the futility exception to the demand requirement.

Full Opinion

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Mack Sperling
Brooks Pierce, LLP
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