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Faruqi & Faruqi Obtains Significant Victory in In re Lihua International, Inc. Shareholder Derivative Action On Behalf Of Lihua International, Inc. And Its Shareholders

March 09, 2016

United States District Judge Ronnie Abrams denied, in part, a motion to dismiss filed by Lihua International, Inc., and former and/or current officers and/or directors Robert C. Bruce, Daphne Yan Huang, Siu Ki Lau, Jonathan P. Serbin, Tianbao Wang, and Ming Zhang, March 9, 2016.  The Court sustained counts of breach of fiduciary duties, waste of corporate assets and gross mismanagement.  Judge Abrams commented that "Plaintiffs have adequately pled that Lihua's directors failed to supervise its operations in China." As noted by Chancellor Allen in In re Caremark Int'l, 698 A.2d 959, 967 (Del. Ch. 1996), director liability based on the duty of oversight " is possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment." Judge Abrams ordered the parties to submit a joint letter by March 16, 2016, indicating availability for a pre-trial conference to be held later in March or April.

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