Lynch v. Welan Investment Co.

How courts have described this case

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

• holding that the internal affairs doctrine governs a party’s “standing to sue derivatively, including its presuit demand obligations”
• declining to reach appellee’s alternative contention after affirming the Court of Chancery’s determination on narrow standing grounds
• suggesting that a parent may enforce the claims of a wholly-owned subsidiary either indirectly, i.e., through a derivative action, or by causing the subsidiary to enforce the claim by “direct exercise of its 100 percent control” of the subsidiary
• plaintiff, who owned shares only in parent corporation and sued directors of third-tier subsidiary for breaches of fiduciary duty, required to demonstrate standing to assert triple-derivative claims
• “[The plaintiff’s] standing to sue derivatively, including its presuit demand obligations, is governed by the derivative standing rules that apply at the parent . . . level.”
• “[S]ome courts in other jurisdictions have recognized a double derivative right in the case of a less-than-wholly-owned subsidiary, but Delaware courts have not yet ruled on that issue.”

Source: CourtListener parenthetical corpus (CC0).