Opinion ID: 1470259
Heading Depth: 1
Heading Rank: 4

Heading: Count XIII Dismissed

Text: After the defendants moved to dismiss on the grounds that the Merger had extinguished Feldman's standing to prosecute this litigation, Feldman filed a Third Amended Complaint and added Count XIII, the only count at issue in this appeal. [6] Count XIII alleges that the defendants breached their fiduciary duties by not reconsidering the validity of the Challenged Stock Options before approving the Merger agreement. The Court of Chancery rejected Feldman's argument that Count XIII stated a direct claim under Tooley, [7] and held that Count XIII is solely derivative in nature. The Court of Chancery ruled that the alleged harm for which Feldman seeks relief in Count XIII is the same as the Company would have suffered from the invalidity of the Challenged Stock Options and, under Tooley, is derivative in nature. The Court of Chancery concluded Count XIII was an attempt by Feldman to avoid dismissal for lack of standing after the Merger by creatively attempting to recast a derivative claim by alleging the same fundamental harm in a slightly different way. . . . [8] The Court of Chancery dismissed the entire proceeding, holding that the Third Amended Complaint's fourteen counts set forth only derivative claims. Under this Court's decision in Lewis v. Anderson , [9] Feldman lacked standing because derivative claims may be maintained only by stockholders who own shares throughout the litigation.