The Delaware Court of Chancery, in United Food and Commercial Workers Union and Participating Food Industry Employers Tri-State Pension Fund v. Mark Zuckerberg, et al. and Facebook, Inc., C.A. No. 2018-0671-JTL, opinion (Del. Ch. Oct. 26, 2020), dismisses derivative claims challenging director defendants’ agreement to support a stock reclassification that would provide nominal defendant’s founder with permanent voting control — a transaction that was abandoned after being challenged in a prior lawsuit — for failure to make demand, finding that directors could believe in good faith that the founder’s permanent control was in the company’s best interests, and rejecting plaintiffs’ argument that directors’ affiliation with venture capital firms overcame Delaware law’s presumption of director independence based on venture firms’ reliance on “deal flow” from the founder.
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