Haynes and Boone Wins Texas Supreme Court Ruling on Demand Letter in Derivative Case

05/27/2009

Note to plaintiffs attorneys thinking of filing a derivative suit in Texas: Make sure your demand letter to the board has some meat to it. In a case of first impression, the Texas Supreme Court ruled last Friday that a one-page demand letter that Coughlin Stoia Geller Rudman & Robbins sent to the board of Lancer Corporation did not meet the standards the state's legislature set for launching a derivative suit.

In an 8-to-0 ruling, the Texas Supreme Court agreed with Haynes and Boone's arguments. On Wednesday we spoke with Nick Even, who was on the winning Haynes and Boone team (along with George Bramblett, Jr., Lamont Jefferson, and Debbie McComas). He told us that the Texas legislature revised the standards for demand letters back in 1997 in an effort to make the state more friendly to businesses. With this decision, Even said, "the Texas Supreme Court has recognized that."

Article excerpted from American Lawyer's Litigation Daily.  For full text, click here.

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