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Citigroup Obtains Dismissal of Derivative Complaint

Paul, Weiss obtained a victory for Citigroup when Justice Fried of the New York Supreme Court dismissed a derivative complaint filed by a Citigroup shareholder. Plaintiff had demanded that Citigroup sue certain current and former directors, officers and employees for alleged breaches of their fiduciary duties with respect to Citigroup's subprime-related exposures. Following a lengthy investigation by a demand committee formed by the Board, the demand committee recommended that the Board reject the plaintiff's demand and the Board adopted the committee's recommendation.

Plaintiff filed a complaint asserting claims for breaches of fiduciary duty and waste arising out of the Board's investigation of his demand. The court granted defendants' motion to dismiss in its entirety, rejecting plaintiff's allegations criticizing the reasonableness and good faith of the Board in investigating plaintiff's demand and finding that plaintiff failed adequately to plead demand futility with respect to his purported waste claim. Finally, the court denied plaintiff's request for leave to amend his complaint.

The Paul, Weiss team included litigation partners Susanna M. Buergel, Charles E. Davidow, Brad S. Karp and Richard A. Rosen.

May 18, 2012

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