From Professor Bainbridge:
This is the fourth in a series of posts that collectively constitute a short monograph on the role of the demand requirement in derivative litigation. In this post, we turn to the policy question of when the board should be able to take control of a shareholder-initiated derivative lawsuit.
The Zapata court correctly identified the basic issue: If the corporation can consistently defeat bona fide derivative actions through procedural devices, much of the derivative suit’s supposed utility in punishing and deterring managerial misconduct will evaporate. On the other hand, the underlying cause of action belongs to the corporation and the corporation should be able to rid itself of nonmeritorious or even harmful litigation. (footnote omitted.)
Read the whole discussion, with citations, at the above link. Parts I, II and III of this series can be accessed here. This 4-part series is must reading for anyone who wants a "quick refresher course" or an overview, with citations to the seminal cases, of this important area of corporate litigation. The good professor’s "blog version of a monograph" is an excellent example of how blogs by law professors are making scholarly insights on complicated areas of the law more available to the practicing bar (and the bench) than was formerly the case via law reviews or treatises.