futility exception in Maryland

2025In sum, although the Werbowsky opinion did not “yet . . . close the door” on the futility exception (Boland v. Boland, 423 Md. at 331 n.25), the Court substantially narrowed the scope of the exception.

2025In Boland v. Boland, 423 Md. 296 (2011), an appeal concerning the grant of summary judgment in a demand refusal action, the Court commented on the “narrowing” of the futility exception.

2025Id. at 620. 41 The Court has explained that “[t]his exception to the demand requirement is quite narrow and does not encompass every instance in which a majority of the board of directors is interested.” Oliviera v. Sugarman, 451 Md. at 229 .

2010The business judgment rule “applies to all decisions regarding the corporation’s management,” which “insulate[s] *505 the business decisions made by the director from judicial review, absent a showing of fraud, self-dealing, unconscionable conduct, or bad faith.” Shenker, 411 Md. at 344 , 983 A.2d 408 (emphasis added).

2010The business judgment rule “applies to all decisions regarding the corporation’s management,” which “insulate[s] *505 the business decisions made by the director from judicial review, absent a showing of fraud, self-dealing, unconscionable conduct, or bad faith.” Shenker, 411 Md. at 344 , 983 A.2d 408 (emphasis added).

2001The Hawes Court stated in regard to this requirement that “[t]he efforts to induce such action as complainant desires on *626 the part of the directors, and of the shareholders when that is necessary, and the cause of failure in these efforts should be stated with particularity....” Hawes, 104 U.S. at 460-61 .

2001We noted that, in *607 considering the entire question, “it should be kept in mind that the trend in the more modern authorities is to be more tolerant of the derivative suits of minority members or stockholders” in that “[t]he size and complexity of corporate transactions makes necessary and important this form of ‘legal therapeutics.’ ” Id. at 86 , 242 A.2d at 546 . 6 Whatever may have been the perceived trend in 1968, when Parish was decided, the trend since then has been to enforce more strictly the requirement of pre-suit demand and at least to circumscribe, if not effectively eliminate,

2001We noted that, in *607 considering the entire question, “it should be kept in mind that the trend in the more modern authorities is to be more tolerant of the derivative suits of minority members or stockholders” in that “[t]he size and complexity of corporate transactions makes necessary and important this form of ‘legal therapeutics.’ ” Id. at 86 , 242 A.2d at 546 . 6 Whatever may have been the perceived trend in 1968, when Parish was decided, the trend since then has been to enforce more strictly the requirement of pre-suit demand and at least to circumscribe, if not effectively eliminate,

2001Until Kamen, supra, 500 U.S. 90 , 111 S.Ct. 1711 , 114 L.Ed.2d 152 , some of the Federal courts had fashioned a Federal common law that embodied both the requirement and the exception.

2001Until Kamen, supra, 500 U.S. 90 , 111 S.Ct. 1711 , 114 L.Ed.2d 152 , some of the Federal courts had fashioned a Federal common law that embodied both the requirement and the exception.

2001The Court elucidated further on the futility exception in Davis v. Gemmell, 70 Md. 356 , 17 A. 259 (1889), where a shareholder sued to have a judgment that had been entered in the name of an assignee of the president of the corporation declared to be the property of the corporation.

2001The Court elucidated further on the futility exception in Davis v. Gemmell, 70 Md. 356 , 17 A. 259 (1889), where a shareholder sued to have a judgment that had been entered in the name of an assignee of the president of the corporation declared to be the property of the corporation.