Kebis v Azzurro Capital Inc.

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Kebis v Azzurro Capital Inc. 2014 NY Slip Op 30171(U) January 21, 2014 Supreme Court, New York County Docket Number: 650253/12 Judge: Barbara R. Kapnick Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 01/23/2014 1] INDEX NO. 650253/2012 NYSCEF DOC. NO. 28 RECEIVED NYSCEF: 01/23/2014 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY - Jt,RBARA R. Kt..\PNICK PRESENT: ¢ PART ,)Cf Justice ' T I I I Index Number: 650253/2012 KEBIS, PAMEL E vs. AZZURRO CAPITAL INC. SEQUENCENUMBER:001 INDEX NO. MOTION DATE I I I I DISMISS ACTION MOTION SEQ. NO. The following papers, numbered 1 to _ _ , were read on this motion t o / f o r - - - - - - - - - - - - - No(s)._ _ _ _ __ Notice of Motion/Order to Show Cause - Affidavits - Exhibits Answering Affidavits - Exhibits----------------- Replying Affidavits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ I I No(s). - - - - - 1No(s). - - - - - - Upon the foregoing papers, It is ordered that this motion is w 0 ~ MOTION IS DECIDED It-! ACCORDANCE Win~ ACCOMPANYiNG MEMORAt~OUM DECISION ::> .., ~ c w a: a: w w u. a: .. >- e z ::> 0 u. en t; ~ ...J ...J w a: 3; w (!) z a: en ~ - 0 w ...J "' < 0 ...J 0 u. ~ a: :::E tL - w z :J: 0 .... Oo Dated: J )81 I JI'-/ I 1. CHECK ONE: ..................................................................... icASE DISPOSED 2. CHECK AS APPROPRIATE: ............. ¢. ¢.. ¢.. ¢.. ¢. ¢ MOTION IS: 4RANTED 3. CHECK IF APPROPRIATE: ................................................ 0 0 DENIED 0 0 GRANTED IN PART 0 SETILE ORDER ODO NOT POST 0 OTHER SUBMIT ORDER FIDUCIARY APPOINTMENT 0 REFERENCE [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IA PART 39 --------------------------------------x PAMELA E. KEBIS, derivatively on behalf of Nominal Defendant TRAVELZOO, INC., DECISION/ORDER Index No. 650253/12 Motion Seq. Nos. 001, 002 and 003 Plaintiff, - against AZZURRO CAPITAL INC., RALPH BARTEL, HOLGER BARTEL, DAVID J. EHRLICH, KELLY M. URSO and DONOVAN NEALE-MAY, Defendants, - and TRAVELZOO INC., Nominal Defendant. -------------------------------------x BARBARA R. KAPNICK, J.: This is a shareholder derivative action brought against the members of Travelzoo Inc.' s ("Travelzoo") Board of Directors to remedy alleged breaches of fiduciary duties and unjust enrichment. In a nutshell, plaintiff challenges as unfair the sale, in the Fall of 2009, of Travelzoo's Asia Pacific division to the Company's then Chairman, Founder and majority stockholder, defendant Ralph Bartel, for $3.6 million. Three motions are now before the Court. In motion seq. no. 001, defendants Ralph Bartel, Holger Bartel and nominal defendant Travelzoo move to dismiss the Complaint with prejudice pursuant to CPLR 3211 002, (a) (1), defendants (3) and David J. (7), and 3016 (b). Ehrlich ("Ehrlich") , In motion seq. no. Donovan Neale-May [* 3] ("Neale-May") and Kelly M. Urso Complaint pursuant to CPLR 3211 motion seq. no. the Business plaintiff to ("Urso") (a) (3) move and (7) to dismiss the and 3016(b). In 003, Travelzoo moves, pursuant to section 627 of Corporation provide including attorneys' Law ("BCL"), security for fees, for the an order requiring reasonable expenses, that Travelzoo has and will expend to defend this derivative action. At oral argument on these motions, the parties stipulated that Travelzoo's request for security would be deferred until the motions to dismiss were decided, and, if the Complaint was not dismissed, addressed at the first scheduled conference (Tr.· 33:3-34:16, Oct. 22, 2012.) Background Plaintiff Pamela E. Kebis claims that she is, and was at all times relevant to this lawsuit, a shareholder company founded in 1998 by Ralph Bartel. of Travelzoo, (Complaint, <]!':!I 2, a 5.) Travelzoo is a global internet media company in the business of publishing travel, entertainment and local deals. (Id., ':!l':!I 3, 16.) Most of its revenues are generated through advertising fees. Defendant Azzurro Capital ("Azzurro Inc. Capital") (Id.) is a company, 100% of which is held indirectly by Ralph Bartel through i the Ralph Bartel 2005 Trustp (Id., ':!I 41 ) Azzurro Capital allegedly owned approximately 66.3% of Travelzoo's outstanding common stock 2 [* 4] as of March 31, 2009, and was, therefore, the controlling shareholder of Travelzoo as of the date of the events that form the basis of this lawsuit. January 12, 2012, (Id.) plaintiff As of the filing of this action on alleges that Az zurro Capital approximately 51.6% of Travelzoo's outstanding common stock. held (Id.) According to Travelzoo's public filings, the Company was controlled by Ralph Bartel and Azzurro Capital at all times between March 2009 and May 2011, Directors. and (Id., they elect the Company's entire Board of 18-21.) <JI<JI Ralph Bartel has been a director of Travelzoo since July 2010. (Id., <JI 5.) He previously served as Chairman of the Board from May of 1998 to June of 2010; and also as Chief Executive Officer of Travel zoo from May 1998 to September 2008. Defendant (Complaint, <JI Holger 6.) Bartel is the (Id.) brother of Ralph Bartel. Holger Bartel has been a director of Travelzoo since June of 2005, Chairman of the Board since July 2010, and was the Company's Chief Executive Officer from October 1, 2008 through June 30, 2010. (Id.) Defendants Ehrlich, Urso, and Neale-May have served as directors of Travelzoo since February of 1999, and each have been a member of the Board's audit committee since at least 2002. (Id., <Jl<Jl 7-9.) 3 [* 5] On August 14, 2009, Travelzoo announced that it had entered into a non-exclusive letter of intent and non-binding term sheet to sell substantially all of the assets of the Company's Asia Pacific division to a new company to be formed by Ralph Bartel. (Complaint, <JI 2 3. ) In connection with the announcement, Holger Bartel explained that Travelzoo could enhance shareholder value by transferring the capital then at work in the Asia Pacific region to Europe and North America, search engine. (Id., <JI as 24.) well as to following Urso two and Neale-May. announcements nascent "Fly. corn" Travelzoo formed a Special Committee of directors to oversee this transaction, Ehrlich, its (Id., in <JI composed of defendants 25.) connection Ehrlich with the made proposed transaction: Absent [ ] a superior off er from another party, we anticipate closing a transaction with Mr. Bartel in a relatively short period of time, thereby conserving company capital for alternative uses. * * * Having a knowledgeable, well-capitalized party take over and fund Travelzoo' s Asia Pacific business, with the option to re-acquire the business in the future, is an attractive and prudent alternative. In this way, Travelzoo's brand exposure and content in the region will be further developed while the company's capital resources may be conserved or more judiciously applied elsewhere. While the Asia Pacific division is showing steady growth, it remains capital intensive. (Id.) 4 the [* 6] On September 30, 2009, following a recommendation Special Committee and Board approval, Travelzoo and by its the Asia Pacific subsidiaries entered into asset purchase agreements with Azzurro Capital. (Id., <JI 26.) The purchase price was $3.6 million, subject to a working capital adjustment (Id.). Travelzoo was given a 30-day "go-shop" period, during which time it could solicit other proposals, and accept a superior offer from another buyer by paying a $54,000 termination fee to Azzurro Capital. (Id., <JI 27.) However, the Board authorized the Company's management to terminate the go-shop period early if management determined that a qualified bidder was not likely to make a superior offer within that time period. (Id., <JI 28.) The Complaint alleges that Travelzoo never disclosed to its shareholders whether it received any offers during the go-shop period or even if the Company shopped the opportunity to potential alternative purchasers. On October 31, (Id., 2009, <JI 29.) the Company completed the sale of the Asia Pacific division to Azzurro Capital at the agreed upon price of $3.6 million, subject to a working capital adjustment. 31.) 5 (Id., <JI [* 7] Plaintiff alleges that the sale was "manifestly unfair" and "fundamentally unfair" to Travelzoo, because the market value of the Asia Pacific (Id., ~~ 32, 34). assets was far greater than $3.6 million. They cite to statements made by Holger Bartel in the quarters preceding the transaction in which he is alleged to have repeatedly stated that the Asia revenue" opportunities for Pacific markets were "new Travel zoo and would provide a "competitive advantage from being able to cross-sell advertising globally." (Id., ~ 33.) Plaintiff further challenges as unfair the process by which the (id., transaction ~ 36), was since proposed, each negotiated member of the and entered Special Committee allegedly "beholden" to Ralph Bartel and Azzurro Capital. 37.) In addition, plaintiff alleges that, into (Id., is ~ upon information and belief, neither the Board nor the Special Committee: (1) retained any independent legal counsel, financial advisor, or other advisors or experts to advise transaction; regarding the ( 2) them in connection with sought or obtained ( 3) transaction; any engaged the Asia "fairness in any Pacific opinion" meaningful negotiations with Azzurro Capital or Ralph Bartel regarding the terms. of the transaction; transactions or terms. (Id., or ~ (4) 38.) 6 considered any. alternative [* 8] Plaintiff concedes that she did not make a Travelzoo's Board prior to commencing this lawsuit. demand (Id., upon '44.) The Complaint alleges that "[s]uch demand would be a futile and useless act because the Board is incapable of making an independent and disinterested decision to institute and vigorously prosecute this action." (Id.) Plaintiff further alleges that Ralph Bartel and Azzurro Capital, the Company's controlling shareholders, "had a conflicting self-interest in and stood on both sides of the Asia Pacific Transaction." (Id., '45.) Accordingly, as a matter of law, the business judgment rule does not protect the Board's or the Special Committee's decision to approve the transaction. Rather, Defendants bear the burden of proving the entire fairness of the transaction, which they have not done and cannot do so. Consequently, no demand on the Board is required. (Id.) The Complaint has asserted three causes of action. The first cause of action asserts that the individual defendants breached their fiduciary duties to Travelzoo by failing to make a good faith effort to fully inform themselves about the transaction and by failing to ensure that it was entirely fair to Travelzoo. (Id. ' ' 46-49.) The second cause of action alleges that Azzurro Capital and Ralph Bartel stockholders breached of their Travelzoo, fiduciary to ensure duties, that transaction was entirely fair to Travel zoo. 7 as the (Id. controlling Asia Pacific 'Il'Il 50-53.) The [* 9] third cause of action alleges that Azzurro Capital and Ralph Bartel were unjustly enriched by the Asia Pacific transaction. ~~ (Id., 54-56.) Discussion Travelzoo is a that Delaware Tully, law Delaware Corporation, applies 243 AD2d 229, 232 to this and all parties agree derivative action. Wilson v (1st Dept 1998). Nominal defendants Travelzoo and the Bartel defendants first argue that the Complaint should be dismissed, pursuant to CPLR 3211 (a) (3), because the plaintiff lacks derivative standing to bring this action. Specifically, they argue that the plaintiff did not sufficiently plead her ownership of Travelzoo stock at the time of the Asia Pacific transaction through the time of this litigation, in contravention of the "continuous ownership" Delaware to determine derivative standing, Chancery Court Rule 23. 1 (a) and 8 Del C rule applied in citing both Delaware § 327. Rule 23.1 (a) provides that "the complaint shall allege that the plaintiff was a shareholder or member at the time of the transaction of which the plaintiff complains or that the plaintiff's share or membership thereafter devolved on the plaintiff by operation of law.u Similarly, Section 327 of Delaware's General Corporation Law provides: 8 [* 10] In any derivative suit instituted by a stockholder of a corporation, it shall be averred in the complaint that the plaintiff was a stockholder of the corporation at the time of the transaction of which such stockholder complains or that such stockholder's stock thereafter devolved upon such stockholder by operation of law. In this case, plaintiff alleges that she "was a shareholder of Travelzoo at the time of the wrongdoing alleged herein, been a shareholder (Complaint, ~ of Travelzoo continuously since and has that time" 2.) There appears to be some conflict in the law on whether a derivative plaintiff must plead with particularity the details of her stock ownership. Travelzoo and the Bartels cite cases where courts have held that such boilerplate assertions, without any supporting facts as to the timing and amount of the plaintiff's stock ownership, were insufficient to plead derivative standing, see DiLorenzo v Norton, 2009 WL 2381327, *3 (DOC, July 31, 2009); In re Verisign, Inc., Derivative Litig., 531 F Supp 2d 1173, 1187- 1188, 1202 (ND Cal 2007). Plaintiff, on the other hand, cites cases that have held that allegations identical to those in her Complaint were sufficient for purposes of Fed. R. Civ. P. 23.1, which is virtually identical to Delaware Chancery Court Rule 23.1, see Garza ex rel. Navistar Intern. Corp. v Belton, 2010 WL 3324881, *9 (ND Ill, Aug. 13, 2010); Plymouth County Retirement Ass'n. 9 v [* 11] Schroeder, 576 F Supp 2d 360, 526 F Supp 2d 392, 407 Inc., 374 (ED NY 2008); Kalin v Xanboo, (SONY 2007). This Court finds the following reasoning of Judge Gottschall in the Garza case to be persuasive: Specific allegations regarding dates of purchase and ownership may be the 'best practice,' but the court cannot agree that [Fed. R. Civ. P.] 23.l(b) (1) requires pleading with particularity (or, alternatively, that Rule 23 .1 (b) ( 1) 's notice pleading requirement requires pleading specific dates of stock ownership). The rule's drafters knew how to require that elements of a derivative action be pleaded with particularity and chose not to require that the contemporaneous stock ownership requirement be so pleaded. While Rule 23 .1 (b) ( 3) mandates that the plaintiff 'state with particularity' his reasons excusing demand on the corporation, Rule 23.1 (b) (1) requires only that the plaintiff 'allege' contemporaneous stock ownership. Therefore, the court agrees with the authority from the Second Circuit enforcing general notice pleading standards with respect to allegations of contemporaneous stock ownership. Garza ex rel. Navistar Intern. (internal citations omitted). Rule 23.1 nor 8 Del C § Corp., 2010 WL 3324881, *10 Here, since neither Chancery Court 327 require particularity with respect to a derivative plaintiff's stock ownership, 1 this Court finds that the plaintiff's allegation of her stock ownership in Travelzoo is sufficient. 1 BCL § 626 (b) also does not require a complaint to plead with particularity a derivative plaintiff's continuous stock ownership. 10 [* 12] Next, all defendants move for dismissal of the Complaint on the ground that the Complaint fails to plead, with the requisite particularity required by Chancery Court Rule 23.1, facts establishing that a demand on Travelzoo's Board to take action to remedy the alleged unfairness of the Asia Pacific transaction would have been futile. "The decision behalf of the whether to initiate or corporation is generally pursue within a lawsuit on the power and In re Ci ti group Inc. responsibility of the board of directors," Shareholder Derivative Litigation, 964 A2d 106, 120 (Del Ch 2009); see also White v Panic, 783 A2d 543, 550 (Del 2001). Since a derivative action impinges on the managerial freedom of directors, a shareholder must first make a pre-suit demand on the Board of Directors to take remedial action so that the directors have the opportunity to examine the alleged claim and determine whether pursuing the claim is in the best interests of the corporation, Aronson v Lewis, requirement of resolution" that 473 A2d 805, Rule is 23.1 is 811-812 a designed to (Del "form give 1984). of the The demand alternate dispute corporation the opportunity to rectify shareholder complaints without litigation, and to control any litigation which does arise (Id. at 812). 11 [* 13] Circumstances do sometimes exist, however, under which making a demand upon a Board will prove a fruitless and futile gesture, and is therefore excused. Pursuant to the seminal test articulated in Aronson v Lewis, demand upon a Board of Directors is excused where a plaintiff pleads particularized facts (as required by Rule 23.1) which raise a reasonable doubt that: "(1) the directors are disinterested and independent [or] (2) the challenged transaction was otherwise the product of a valid exercise of business judgment" Brehm v Lewis, Eisner, 746 A2d 244, 473 A2d at 814; Derivative Litig., 964 253 (Del 2000), citing Aronson v see also In re Citigroup Inc. A2d at 120; Security Professionals of Am. Retirement Fund v Mack, Shareholder Police & Fire 93 AD3d 562, 563 (1st Dept 2012). In the instant case, despite the Complaint's allegations that each member of the Special Committee was "beholden" to Ralph Bartel and Azzurro Capital, and a majority of the Board was not truly disinterested or independent (see Complaint, ~ 37), on this motion, plaintiff does not challenge the independence of the three members of the Special Committee and, thus, makes no argument of demand futility under the first prong of the Aronson test. In explaining Aronson' s second prong, (Tr. 16:5-11.) the Delaware Supreme Court has stated that a plaintiff bears a "'heavy burden' of showing 12 [* 14] that the well-pleaded allegations in the complaint create a reasonable doubt that the board's decisions were 'the product of a valid exercise of business judgment'" White v Panic, 551, quoting Aronson v Lewis, 7 8 3 A2d at 473 A2d at 814. Plaintiffs may rebut the presumption that the board's decision is entitled to deference by raising a reason to doubt whether the board's action was taken on an informed basis or whether the directors honestly and in good faith believed that the action was in the best interests of the corporation. Thus, plaintiffs must plead particularized facts sufficient to raise (1) a reason to doubt that the action was taken honestly and in good faith or ( 2) a reason to doubt that the board was adequately informed in making the decision. In re The Walt Disney Co. Derivative Litig., 825 A2d 275, 286 (Del Ch 2003) whether Four years later, the Delaware Chancery Court ruled that a transaction falls beyond the bounds of the business judgment rule for Aronson purposes turns on whether a complaint pleads facts sufficient to allow a court to infer that a Board of Directors "knew that material decisions were being made without adequate deliberation in a manner that suggests that [the Board of Directors] did not care shareholders would suffer a loss" In re Tyson Foods, Inc. Consol. Shareholder Litig., 919 A2d 563, 595 (Del Ch 2007). The Chancellor in Tyson Foods characterized this as "a scienter-based test," and stated that "a complaint must allege not only that the directors were incorrect in their assessment at the time" of a decision relating to an insider transaction, 13 "but that [* 15] they either intended to harm shareholders, absolutely careless in the matter." or at least were (Id.). Plaintiff argues that she has met her burden by pleading that Ralph Bartel and Azzurro Capital, stockholders of Travelzoo at the majority and controlling the time of the Asia Pacific transaction, "stood on both sides" of the Asia Pacific transaction (Complaint, business ~ 45). judgment Given these facts, plaintiff argues that the standard articulated by the Delaware Supreme Court in Aronson gives way to the more stringent "entire fairness" standard in determining protest of the Asia whether making demand Pacific transaction was relies principally on Kahn v Tremont Corp., on the Board futile. in Plaintiff 694 A2d 422, 428 (Del 1997), where the Delaware Supreme Court held that in evaluating a transaction where "a controlling shareholder stands on both sides of the transaction the conduct of the parties will be viewed under the more exacting standard of entire fairness as opposed to the more deferential business judgment standard." Kahn was a post-trial opinion in which the Court was discussing the fairness of the challenged transaction, not pleading demand futility. In addition, none of the three cases cited by the Delaware Supreme Court in Kahn (Weinberger v UOP, Inc., 457 A2d 701 [Del 1983]; Rosenblatt v Getty Oil Co., 493 A2d 929 [Del 1985]; and 14 [* 16] Kahn v Lynch Communications Systems, Inc., 638 A2d 1110 [Del 1994]), apply the futility. entire fairness doctrine to the concept of demand Indeed, an earlier decision in the Kahn litigation by the Court of Chancery applied the Aronson test to determine demand futility had been excused, Kahn v Tremont Corp., 162613, * 5-6 (Del Ch, Apr. 21, 1994). if 1994 WL Even though the transaction at issue in Kahn alleged self-dealing by a controlling shareholder, the Court of Chancery applied the business judgment rule in analyzing the second prong of the Aronson test, calling it a "high" legal test, "similar to the legal test for waste" (Id., at *6; see also International Painters and Allied Trades Industry Pension Fund v Cantor Fitzgerald L.P., 2013 WL 5311203 (Sup Ct., NY Co. Sept. 23, 2013). The Complaint in this action does not plead with particularity sufficient facts to raise a reasonable doubt that the actions of Travelzoo's Board were taken honestly and in good faith, or that the Board was not sufficiently informed so as to rise to a level approaching scienter. The Complaint simply recites the basic terms of the Asia Pacific transaction, Holger Bartel regarding negotiation process, terms, the some public statements made by sale, and concludes that the price and other aspects of the Asia Pacific transaction were fundamentally unfair to Travelzoo without providing any real facts to support these assertions. 15 [* 17] Many of the plaintiff's allegations of unfairness stem from a lack of information about the transaction, i.e., whether any offers were received during the 30-day go-shop period. ~29) . (see Complaint, Plaintiff concedes that her allegations regarding how the transaction was negotiated, reviewed and approved by the Special Committee and the Board are based "upon information and belief." (Complaint, of the ~ 38.) It should be noted that at least some details negotiation process could have been acquired by the plaintiff without formal discovery, as Delaware General Corporate Law Section 220 (b) and records urged of a would-be (2) allows a stockholder to examine the books corporation. derivative Delaware courts plaintiffs to use have this repeatedly information gathering tool before filing complaints so that they can satisfy Rule 23.l's requirement that facts be alleged "with particularity" justifying demand excusal, see e.g. Rales v Blasband, 634 A2d 927, 934, n 10 (Del 1993); In re Citigroup Inc. Shareholders Litigation, 2003 WL 21384599, Rabinovi tz v * 1 Shapiro, (Del 839 Ch, A2d June 666 5, 2003)' (Del 2003) . aff' d sub nom. " [ T] he demand requirement of Chancery Rule 23.1 exists at the threshold, first to insure that a stockholder exhausts his prior to commencing litigation, intracorporate remedies" Aronson v Lewis, 473 A2d at 811- 812. In addition to plaintiff's lack of knowledge about the details of the transaction, she makes at least one allegation which is 16 [* 18] contrary to the public filings upon which she relies to frame her Complaint. Where a shareholder's derivative complaint expressly refers to, and heavily relies upon, the company's public filings, those documents are "considered to have been incorporated into the Complaint," and may be considered on a motion to dismiss, Freedman v Adams, 2012 WL 1345638, * 2, n 7 (Del Ch, Mar. 30, 2012), aff'd 58 A3d 414 (Del 2013); Litigation, 50 A3d 1022, 1026 (Del Ch 2012). alleges that see also In re Synthes, Inc. Shareholder Here, the Complaint Travel zoo never disclosed whether "it shopped the opportunity to potential alternative suitors." (Complaint, However, the Company's Form 8-K, dated September ~ 30, 29.) 2009, specifically states that "Travelzoo initiated the solicitation of other offers following the signing of the letter of intent [with Ralph Bartel]" (Hakki Aff., Ex. 7, at 2). The Complaint itself concedes some legitimate business reasons existed for selling the Asia Pacific division, i.e., the comments of Holger Bartel in Travelzoo's August 14, 2009 press release that the division was "capital intensive" and the Company believed that it could enhance shareholder value by transferring the capital then at work in the Asia Pacific region to Europe and North America, as well as to its new "Fly.com" search engine (Complaint, ~~ 24-25). Plaintiff omits to point out that in that same press release upon which it relied so heavily, the Company reported that "[f]or the twelve 30, months ended June 2009, 17 Travelzoo's Asia Pacific [* 19] division reported revenues of approximately $1.5 million and an operating loss of approximately $7.8 million" (Hakki Aff., Ex. 6). The Complaint also concedes that Travelzoo retained the right to re-acquire the Asia Pacific division in the future# (Complaint, ~ 25.) Plaintiff's conclusory allegations challenging the manner in which the Asia Pacific transaction was undertaken as unfair do not come close to rebutting the presumption of the business judgment Delaware law is clear that this prong is directed to cases rule. in which a "decision is so extreme or curious as to itself raise a legitimate ground to justify further inquiry and judicial review", Highland Legacy Ltd. v Singer, 2006 WL 741939, *7 (Del Ch, Mar. 17, 2006). Plaintiff's challenge to the $3.6 million purchase price is effectively a claim for waste, but the Complaint fails to allege facts that would show that "the ethics of the transaction were so flawed that no disinterested person of right mind and ordinary business judgment could think the transaction corporation" Harbor Finance Partners v Huizenga, beneficial to the 751 A2d 879, 893 (Del Ch 1999). Since the entire Complaint is being dismissed for failure to meet the exacting burden of pleading demand futility under Delaware Chancery Court Rule 23.1, the Court need not address defendants' motions to dismiss on the basis of failure to state a claim for 18 [* 20] relief, Security Police & Fire Professionals of Am. Retirement Fund v Mack, 93 AD3d at 565, citing Jacobs v Yang, (Del Ch, Aug. 2, 2004), aff'd 867 A2d 902 2004 WL 1728521, *1 (Del 2005). Plaintiff's request for leave to replead is denied, she fails to identify any additional would remedy the Complaint's factual because allegations which deficiencies. Conclusion and Order For the foregoing reasons, it is hereby ORDERED that defendants' motions to dismiss dismissed the in its are granted, and entirety with prejudice the Complaint and without costs is or and it is further disbursements; ORDERED Complaint (mot. seq. nos. 001 and 002) that Travel zoo's motion (mot. seq. no. 003) security for expenses pursuant to Business Corporation Law § denied as moot. This constitutes the decision and order of this Court. Dated: January;;)./ , 2014 ~R. l'f i~IT CK J.S.C. 'IAffMstA ff. ""'VW""PWI\;~ M a....-. - .& .J.S.C. 19 for 627 is

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