Opinion ID: 1996638
Heading Depth: 1
Heading Rank: 2

Heading: The Grobow Suit

Text: In December 1986, GM shareholders, Grobow and others (hereinafter the Grobow plaintiffs), filed three separate derivative actions (later consolidated) against GM, EDS, GM's directors, Perot, and three of Perot's EDS associates. As noted above, the suits attacked GM's December 1, 1986 repurchase transaction. All defendants moved to dismiss the action on the ground that the Grobow plaintiffs had failed to comply with Court of Chancery Rule 23.1 because they neither made a pre-litigation demand on GM's Board nor pleaded particularized facts demonstrating that such a demand was excused as futile. Following briefing and oral argument, and before decision on defendants' motion to dismiss, plaintiffs filed an Amended Complaint. Following defendants' renewal of their motion to dismiss and further briefing, the Court of Chancery granted defendants' motion and entered judgment dismissing the action on April 13, 1987. Grobow, 526 A.2d at 914. Plaintiffs appealed to this Court, and this Court, on March 15, 1988, affirmed the decision below. Grobow I, 539 A.2d at 180. Within two months, on May 16, 1988, the Grobow plaintiffs moved the Court of Chancery under Rules 60(b)(2) and 15(a) to vacate the Grobow I judgment and for leave to file a second amended complaint on the basis of newly discovered evidence. The newly discovered evidence consisted of the depositions of two of GM's outside directors obtained in May or June 1987 in a related New York action, and a book published in early 1988 titled Call Me Roger. The Court of Chancery granted in part plaintiffs' motion on January 9, 1989, and plaintiffs then filed a Second Amended Complaint. The Court of Chancery, by decision dated January 2, 1990, granted defendants' renewed Rule 23.1 motion and dismissed the Second Amended Complaint. When the Grobow plaintiffs filed the present appeal, defendants filed cross-appeals from the trial court's January 9, 1989 order granting plaintiffs Rule 60(b) relief and leave to file a second amended complaint.