Filed: May 11, 2010
Opinion by Judge Richard D. Bennett
Held: Under Maryland law and Federal Rule of Civil Procedure 23.1, when a shareholder seeks to pursue a derivative action on behalf of a corporation in receivership, the shareholder must allege with particularity any efforts to have the receiver institute suit or why such efforts would be futile.
Facts: Shareholders of companies in receivership, which also were also defendants in litigation, alleged derivative counterclaims on behalf of the companies. The shareholders alleged that the companies lacked the resources to prosecute the claims. The shareholders did not explain whether the companies exhausted their legal proceedings, nor did they describe the circumstances surrounding the companies' actions in seeking redress. The shareholders also failed to allege with particularity any effort to make the receiver institute suit or why such efforts would be futile. Accordingly, the Court dismissed the shareholder derivative actions under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.
The full opinion is available in PDF.