Derivative Suit Targeting Aeropostale Board Gets Tossed

Law360, New York (January 7, 2014, 6:00 PM EST) -- A New York judge on Tuesday threw out a shareholder derivative suit against directors of teen-focused apparel retailer Aeropostale Inc. that claimed they misled investors about the company’s business prospects, finding the plaintiffs failed to establish demand futility.

After hearing oral arguments on Aeropostale's motion to dismiss the case, Judge Barbara R. Kapnick said that demand futility is reserved for the rare cases where a plaintiff is able to demonstrate appalling conduct by a company’s board of directors, something that has not been shown in this...
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