International Brotherhood of Electrical Workers Local No. 129 Benefit Fund v. Tucci

In these consolidated cases, shareholders of a publicly traded corporation claim that a merger transaction proposed by the board of directors will result in the effective sale of the corporation for an inadequate price. The question we consider is whether they may bring that claim directly against the board members, or must bring it as a derivative claim on behalf of the corporation. We answer that the claim must be brought derivatively. 4

Background. The plaintiffs appeal from the dismissal of their first amended class action complaint (complaint) 5 alleging breaches of fiduciary duty by the…