NY Court Backs Del. Test For Spotting Derivative Suits

Law360, New York (August 8, 2012, 6:31 PM EDT) -- A Manhattan-based state appeals court ruled Tuesday in a precedential decision that New York courts should adopt a method used by Delaware courts to determine whether plaintiffs in a commercial suit bring claims as individual stockholders or derivatively on behalf of a company.

In a unanimous ruling, a five-judge panel backed a method used by the Delaware Supreme Court in its 2004 decision in Tooley v. Donaldson Lufkin & Jenrette Inc. The so-called Tooley test requires a court to consider two factors: whether the business or...
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