Opinion ID: 2189591
Heading Depth: 1
Heading Rank: 5

Heading: Original Complaint Dismissed

Text: In February 1999, all of the defendants moved to dismiss the original complaint on the grounds that the plaintiff was no longer a stockholder of Amax Gold and, therefore, lacked standing to assert derivative claims on its behalf. The Court of Chancery granted the defendants' motion to dismiss based on this Court's holding in Lewis v. Anderson . The effect of a merger, such as the one that took place in this case, is normally to deprive a shareholder of the merged corporation of standing to maintain a derivative action. [4] That general rule is, however, subject to two limited exceptions: (1) Where the merger itself is the subject of a claim of fraud, being perpetrated merely to deprive shareholders of the standing to bring a derivative action; and (2) Where the merger is in reality a reorganization which does not affect plaintiff's ownership of the business enterprise. [5] The plaintiff argued that her original complaint set forth facts that brought this case within the first of two exceptions articulated in Lewis v. Anderson . The Court of Chancery disagreed that the original complaint set forth facts that, if true, alleged the merger was being perpetrated merely to deprive the plaintiff of derivative standing. [6] Because the plaintiff's brief suggested that she might be able to plead such a claim, however, the Court of Chancery granted the plaintiff leave to file an amended complaint.