Kaplan v. Peat, Marwick, Mitchell & Co.

How courts have described this case

Verbatim parenthetical descriptions written by other courts when citing this decision. Ranked by citation-network relevance.

• explaining that the business judgment rule \is not relevant in corporate decision making until after a decision has been made\
• noting the potential for conflict between directors’ power to manage the corporation and the ability of stockholders to bring a derivative action
• a corporation cannot “stand neutral” regarding a derivative action asserted on its behalf but must affirmatively object to it or support it
• “Because the shareholders’ ability to institute an action on behalf of the corporation inherently impinges upon the directors’ power to manage the affairs of the corporation the law imposes certain prerequisites on a stockholder’s right to sue derivatively.”
• “The right to bring a derivative action does not come into existence until the plaintiff shareholder has made a demand on the corporation to institute such an action or until the shareholder has demonstrated that demand would be futile.”
• “The right to bring a derivative action does not come into existence until the plaintiff shareholder has made a demand on the corporation to institute such an action or until the shareholder has demonstrated that demand would be futile.”

Source: CourtListener parenthetical corpus (CC0).