In re Molycorp, Inc. Shareholder Derivative Litig.
Annotate this CaseThis dispute concerned the question of whether a secondary stock offering at an unusually high price, demanded by private equity investors that owned 44 percent of a corporation’s stock and facilitated by the directors that they appointed, impermissibly allowed select shareholders to benefit to the detriment of the corporation. From as early as 2012 complaints were filed related to the sale of stock in June 2011. Plaintiffs in the instant derivative action demanded futility based on the composition of the board at the time of the earlier-filed complaints. Plaintiffs asserted claims for breach of fiduciary duties, aiding and abetting, and unjust enrichment. In light of the investors’ contractual right to sell and the absence of a demonstrable basis for recovery, the Court of Chancery dismissed Plaintiffs’ claims for failure to state a claim.
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