Derivative claim stumbles on conflict of interest

Trial Notebook

By Steven P. Garmisa

Hoey & Farina

Posted March 26, 2021 11:39 AM

Federal Rule of Civil Procedure 23.1 nixes shareholder derivative claims by plaintiffs who won’t “fairly and adequately represent the interests of shareholders or members who are similarly situated.” With sparse local precedent to provide guidance, the first question for U.S. District Judge Virginia M. Kendall in a derivative case filed by members of Specialty Contents Group LLC was whether the plaintiffs — Joe Schroeder Legacy LLC (f/k/a Dryco LLC), Joseph Schroeder, Paul Matthews and John Schroeder — were disqualified …

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