International Painters v Cantor Fitzgerald, L.P.

International Painters v Cantor Fitzgerald, L.P. 2015 NY Slip Op 07450 Decided on October 13, 2015 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on October 13, 2015
Tom, J.P., Andrias, Richter, Kapnick, JJ.
15868 650736/12

[*1] International Painters, etc., Plaintiff-Appellant,

v

Cantor Fitzgerald, L.P., et al., Defendants-Respondents, BGC Partners, Inc., Nominal Defendant-Respondent.

Wolff Popper LLP, New York (Eric L. Zagar of counsel), for appellant.

Mayer Brown LLP, New York (Michele L. Odorizzi of counsel), for respondent.

Judgment, Supreme Court, New York County, (Eileen Bransten, J.), entered April 10, 2014, dismissing the complaint with prejudice, and bringing up for review orders, same court and Justice, entered September 25, 2013 and on or about March 25, 2014, which, respectively, granted defendants' motion to dismiss the complaint and denied plaintiff's motion for reargument, unanimously affirmed, with costs.

This shareholder derivative action involving a Delaware corporation and governed by Delaware law was properly dismissed. Plaintiff failed to plead particularized facts that would, if proved, suffice to raise a reasonable doubt that defendant board members were disinterested and independent, or that their approval of challenged transactions was other than the result of a valid exercise of business judgment, and, accordingly, failed to allege grounds for dispensing with a prelitigation demand upon the subject corporation's directors as an exercise in futility (see Del Ch Ct R 23.1; Aronson v Lewis , 473 A2d 805 [Del 1984]). Plaintiff's argument, that the entire fairness standard applies and demand is excused whenever a transaction is between a corporation and its putative controlling stockholder, is inconsistent with controlling Delaware authority (see [*2]Teamsters Union 25 Health Servs. & Ins. Plan v Baiera , 2015 WL 4237352, 2015 Del Ch LEXIS 185 [Del Ch, July 13, 2015, C.A. No. 9503-CB]; but see Montgomery v Erickson Air-Crane, Inc. , 2014 WL 2207409 [Del Ch, Apr 15, 2014, No. 8784-VCL]).

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: OCTOBER 13, 2015

CLERK