LITIGATORS WIN DISMISSAL OF SHAREHOLDER DERIVATIVE ACTION
On January 25, 2021, Judge Valerie Caproni of the United States District Court for the Southern District of New York issued a 23-page opinion dismissing a shareholder derivative suit against the Firm’s client, the founder and CEO of a publicly-traded technology company specializing in the use of fiber sensors to detect pipeline failures and structural monitoring of buildings, bridges and other infrastructure.
The lawsuit was brought by shareholders, who were also former officers and directors, alleging that management engaged in self-dealing, corporate waste, diversion of assets and breach of fiduciary duty. Plaintiffs’ application for a temporary restraining order and emergency relief had previously been denied and a First Amended Complaint dismissed with leave to amend. Cellucci v. O’Leary, 19-CV-2752, 2020 WL 977986 (S.D.N.Y. Feb. 28 , 2020). Plaintiffs thereafter filed a Second Amended Complaint, which was dismissed as a matter of law for lack of subject matter jurisdiction, failure to comply with the demand requirement of Federal Rule 23.1 and failure to state plausible claims for relief.
The attorneys of the Firm’s Litigation Department handling this case were Jeffrey H. Daichman and David A. Gold. See Cellucci v. O’Leary, No. 19-CV-2752, 2021 WL 242806 (S.D.N.Y. Jan. 25, 2021).