demand requirement in Alabama

1997Blasband v. Rales, 971 F.2d 1034 (3d Cir. 1992); Kamen, supra. "One of the reasons for the directordemand requirement is that it allows the derivative corporation, on whose behalf the action is brought in the first place, to take over the litigation, thus permitting the directors the opportunity to act in their normal status as conductors of the corporation's affairs." Elgin at 814 , citing Shelton v. Thompson, 544 So.2d 845, 849 (Ala.1989). "`Practically speaking, the demand requirement promotes a form of "alternative dispute resolution" — that is, the corporate management may be in a better

1997Blasband v. Rales , 971 F.2d 1034 (3d Cir. 1992); Kamen , supra. "One of the reasons for the director-demand requirement is that it allows the derivative corporation, on whose behalf the action is brought in the first place, to take over the litigation, thus permitting the directors the opportunity to act in their normal status as conductors of the corporation's affairs." Elgin at 814 , citing Shelton v. Thompson , 544 So.2d 845 , 849 (Ala. 1989). " 'Practically speaking, the demand requirement promotes a form of "alternative dispute resolution" — that is, the corporate management may be in a

1997Blasband v. Rales, 971 F.2d 1034 (3d Cir. 1992); Kamen, supra. "One of the reasons for the directordemand requirement is that it allows the derivative corporation, on whose behalf the action is brought in the first place, to take over the litigation, thus permitting the directors the opportunity to act in their normal status as conductors of the corporation's affairs." Elgin at 814 , citing Shelton v. Thompson, 544 So.2d 845, 849 (Ala.1989). "`Practically speaking, the demand requirement promotes a form of "alternative dispute resolution" — that is, the corporate management may be in a better

1997Blasband v. Rales , 971 F.2d 1034 (3d Cir. 1992); Kamen , supra. "One of the reasons for the director-demand requirement is that it allows the derivative corporation, on whose behalf the action is brought in the first place, to take over the litigation, thus permitting the directors the opportunity to act in their normal status as conductors of the corporation's affairs." Elgin at 814 , citing Shelton v. Thompson , 544 So.2d 845 , 849 (Ala. 1989). " 'Practically speaking, the demand requirement promotes a form of "alternative dispute resolution" — that is, the corporate management may be in a

1997Blasband v. Rales , 971 F.2d 1034 (3d Cir. 1992); Kamen , supra. "One of the reasons for the director-demand requirement is that it allows the derivative corporation, on whose behalf the action is brought in the first place, to take over the litigation, thus permitting the directors the opportunity to act in their normal status as conductors of the corporation's affairs." Elgin at 814 , citing Shelton v. Thompson , 544 So.2d 845 , 849 (Ala. 1989). " 'Practically speaking, the demand requirement promotes a form of "alternative dispute resolution" — that is, the corporate management may be in a

1997Blasband v. Rales , 971 F.2d 1034 (3d Cir. 1992); Kamen , supra. "One of the reasons for the director-demand requirement is that it allows the derivative corporation, on whose behalf the action is brought in the first place, to take over the litigation, thus permitting the directors the opportunity to act in their normal status as conductors of the corporation's affairs." Elgin at 814 , citing Shelton v. Thompson , 544 So.2d 845 , 849 (Ala. 1989). " 'Practically speaking, the demand requirement promotes a form of "alternative dispute resolution" — that is, the corporate management may be in a

1989As noted in Lewis v. Curtis , 671 F.2d 779 , 784 [(3d Cir. 1982)], 'because of the important policy behind this rule, "the demand requirement of Rule *Page 863 23.1 should be rigorously enforced." ' (Quoting Cramer v. GT E Corp. , 582 F.2d 259 , 275 (3d Cir. 1978), cert. denied , 439 U.S. 1129 , 99 S.Ct. 1048 , 59 L.Ed.2d 90 (1979).)" Kaufman v. Kansas Gas Elec.

1989As noted in Lewis v. Curtis, 671 F.2d 779, 784 [ (3rd Cir.1982) ], `because of the important policy *851 behind this rule, "the demand requirement of Rule 23.1 should be rigorously enforced."' (Quoting Cramer v. GT & E Corp., 582 F.2d 259 , 275 (3d Cir.1978), cert. denied 439 U.S. 1129 , 99 S.Ct. 1048 , 59 L.Ed.2d 90 (1979). "...

1986See also Barker, 407 U.S. at 528, fn. 28 , 92 S.Ct. at 2191, fn. 28 (wherein the Court cited with approval the American Bar Association's explanation of its rejection of the demand-waiver rule: "`One reason for this position is that there are a number of situations, such as where the defendant is unaware of the charge or where the defendant is without counsel, in which it is unfair to require a demand....'").

1974The Supreme Court of the United States in Barker v. Wingo, 407 U.S. 514 , 92 S.Ct. 2182 , 33 L.Ed.2d 101 , observed in a speedy trial issue as follows: “We, therefore, reject both of the inflexible approaches — the fixed time period because it goes further than the Constitution requires; the demand-waiver rule because it is insensitive to a right which we have deemed fundamental.

2011James established the test for demonstrating the futility of the requisite initial demand as follows: “ ‘[T]he shareholder ... must demonstrate such a degree of antagonism between the directors and the corporate interest that the directors would be incapable of performing their duty.’ ” Id. (quoting Elgin v. Alfa Corp., 598 So.2d 807, 815 (Ala.1992)). 5 None of the foregoing exceptions discussed in Slaughter, Tillery, or James appear to apply to excuse a presuit demand in the present case.

2000Elgin v. Alfa Corp. , 598 So.2d 807 (Ala. 1992); American Life Ins.

1989If, as alleged, this deflated value was the product of illegal or fraudulent conduct on the part of Lexington's directors, then Colonial would presumably deem it desirable and appropriate to seek redress for a loss occasioned by persons who, at the time of the loss, were outside the Colonial corporate structure. [2] If that presumption is correct, and I believe that it is, then for the plaintiffs to give notice to Colonial's directors before bringing a derivative action would not be futile—it would be imperative, given that "the demand requirement of Rule 23.1 should be rigorously enforced." C

1989If, as alleged, this deflated value was the product of illegal or fraudulent conduct on the part of Lexington's directors, then Colonial would presumably deem it desirable and appropriate to seek redress for a loss occasioned by persons who, at the time of the loss, were outside the Colonial corporate structure. [2] If that presumption is correct, and I believe that it is, then for the plaintiffs to give notice to Colonial's directors before bringing a derivative action would not be futile—it would be imperative, given that "the demand requirement of Rule 23.1 should be rigorously enforced." C

2011The purpose of the demand requirement is not to insulate defendants from liability; rather, the demand requirement and the strict requirements of factual particularity under Rule 28.1 ‘exist[] to preserve the primacy of board decisionmaking regarding legal claims belonging to the corporation.’ [In re American Int’l Group, Inc., Consolidated Derivative Litig., 965 A.2d 763, 808 (Del.Ch.2009) ].” In re Citigroup Inc. Shareholder Derivative Litig., 964 A.2d 106, 120 (Del.Ch.2009) (emphasis added) (footnotes omitted).

2011The purpose of the demand requirement is not to insulate defendants from liability; rather, the demand requirement and the strict requirements of factual particularity under Rule 23.1 `exist[] to preserve the primacy of board decisionmaking regarding legal claims belonging to the corporation.' [ In re American Int'l Group, Inc., Consolidated Derivative Litig., 965 A.2d 763, 808 (Del.Ch.2009)]." In re Citigroup Inc. Shareholder Derivative Litig., 964 A.2d 106, 120 (Del.Ch.2009) (emphasis added) (footnotes omitted).

2011The purpose of the demand requirement is not to insulate defendants from liability; rather, the demand requirement and the strict requirements of factual particularity under Rule 28.1 ‘exist[] to preserve the primacy of board decisionmaking regarding legal claims belonging to the corporation.’ [In re American Int’l Group, Inc., Consolidated Derivative Litig., 965 A.2d 763, 808 (Del.Ch.2009) ].” In re Citigroup Inc. Shareholder Derivative Litig., 964 A.2d 106, 120 (Del.Ch.2009) (emphasis added) (footnotes omitted).

2011The purpose of the demand requirement is not to insulate defendants from liability; rather, the demand requirement and the strict requirements of factual particularity under Rule 23.1 `exist[] to preserve the primacy of board decisionmaking regarding legal claims belonging to the corporation.' [ In re American Int'l Group, Inc., Consolidated Derivative Litig., 965 A.2d 763, 808 (Del.Ch.2009)]." In re Citigroup Inc. Shareholder Derivative Litig., 964 A.2d 106, 120 (Del.Ch.2009) (emphasis added) (footnotes omitted).

2011See Riley v. Bradley, 252 Ala. 282, 288 , 41 So.2d 641, 645 (1948) (“[I]n case a trustee refuses to perform his duty to protect the trust, the beneficiaries may sue in equity to protect their rights, in the right of the trustee, but only when that may be necessary to protect their interests.”).

2011See Riley v. Bradley, 252 Ala. 282, 288 , 41 So.2d 641, 645 (1948) (“[I]n case a trustee refuses to perform his duty to protect the trust, the beneficiaries may sue in equity to protect their rights, in the right of the trustee, but only when that may be necessary to protect their interests.”).

1989If, as alleged, this deflated value was the product of illegal or fraudulent conduct on the part of Lexington's directors, then Colonial would presumably deem it desirable and appropriate to seek redress for a loss occasioned by persons who, at the time of the loss, were outside the Colonial corporate structure. [2] If that presumption is correct, and I believe that it is, then for the plaintiffs to give notice to Colonial's directors before bringing a derivative action would not be futile—it would be imperative, given that "the demand requirement of Rule 23.1 should be rigorously enforced." C

1989If, as alleged, this deflated value was the product of illegal or fraudulent conduct on the part of Lexington's directors, then Colonial would presumably deem it desirable and appropriate to seek redress for a loss occasioned by persons who, at the time of the loss, were outside the Colonial corporate structure. [2] If that presumption is correct, and I believe that it is, then for the plaintiffs to give notice to Colonial's directors before bringing a derivative action would not be futile—it would be imperative, given that "the demand requirement of Rule 23.1 should be rigorously enforced." C

1989"The vast majority of federal courts hold that `where mere approval of the corporate action, absent self-interest or bias, is the sole basis for establishing the directors' "wrongdoing" and hence for excusing demand on them, plaintiff's suit should ordinarily be dismissed.' In Re Kauffman Mutual Fund Actions, 479 F.2d at 265 (emphasis added). [Further cites omitted.]" Kaufman v. Kansas Gas & Electric Co., 634 F.Supp. 1573, at 1577-79 (D.Kan.1986).

1989Like darkened ships passing in the night, neither has a fair view of the other.' "Hence, the demand requirement of Rule 23.1 exists at a threshold `"to give the derivative corporation itself the opportunity to take over a suit which was brought on its behalf in the first place, and thus to allow the directors the chance to occupy their normal status as conductors of the corporation's affairs."' Elfenbein v. Gulf & Western Industries, *850 Inc., 590 F.2d 445, 450 (2d Cir.1978), quoting Brody v. Chemical Bank, 517 F.2d 932, 934 (2d Cir.1975).

1989Like darkened ships passing in the night, neither has a fair view of the other.' "Hence, the demand requirement of Rule 23.1 exists at a threshold `"to give the derivative corporation itself the opportunity to take over a suit which was brought on its behalf in the first place, and thus to allow the directors the chance to occupy their normal status as conductors of the corporation's affairs."' Elfenbein v. Gulf & Western Industries, *850 Inc., 590 F.2d 445, 450 (2d Cir.1978), quoting Brody v. Chemical Bank, 517 F.2d 932, 934 (2d Cir.1975).

1989If, as alleged, this deflated value was the product of illegal or fraudulent conduct on the part of Lexington's directors, then Colonial would presumably deem it desirable and appropriate to seek redress for a loss occasioned by persons who, at the time of the loss, were outside the Colonial corporate structure. [2] If that presumption is correct, and I believe that it is, then for the plaintiffs to give notice to Colonial's directors before bringing a derivative action would not be futile—it would be imperative, given that "the demand requirement of Rule 23.1 should be rigorously enforced." C

1989If, as alleged, this deflated value was the product of illegal or fraudulent conduct on the part of Lexington's directors, then Colonial would presumably deem it desirable and appropriate to seek redress for a loss occasioned by persons who, at the time of the loss, were outside the Colonial corporate structure. [2] If that presumption is correct, and I believe that it is, then for the plaintiffs to give notice to Colonial's directors before bringing a derivative action would not be futile—it would be imperative, given that "the demand requirement of Rule 23.1 should be rigorously enforced." C

1989If, as alleged, this deflated value was the product of illegal or fraudulent conduct on the part of Lexington's directors, then Colonial would presumably deem it desirable and appropriate to seek redress for a loss occasioned by persons who, at the time of the loss, were outside the Colonial corporate structure. [2] If that presumption is correct, and I believe that it is, then for the plaintiffs to give notice to Colonial's directors before bringing a derivative action would not be futile—it would be imperative, given that "the demand requirement of Rule 23.1 should be rigorously enforced." C

1930A.) 253 F. 622, 625 (interest from time the demand or claim became due).