Investors' Chancery Suit Can't Show LendingClub's 'Bad Faith'

Law360 (October 31, 2019, 10:58 PM EDT) -- A Delaware vice chancellor on Thursday tossed a derivative suit accusing LendingClub officers of failing to prevent misleading public disclosures about its loan business, ruling the investors failed to show the board acted in "bad faith" or was likely liable for claims.

In a 44-page memorandum opinion, Vice Chancellor Kathaleen S. McCormick ruled that the group of investors who sued the online loan company's officers for alleged breaches of fiduciary duty failed to fulfill certain conditions for filing a derivative suit under Chancery rules.

LendingClub and the officers moved to dismiss the suit, arguing the investors failed to seek company board action before...

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