On April 27, 2020, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery denied defendants’ motion to dismiss because a demand on Kandi Technologies Group, Inc. (“Kandi”) board of directors would have been futile. In doing so, the Vice Chancellor found that plaintiff’s complaint supported “a reasonable pleading-stage inference of a bad faith failure of oversight by the named director defendants.” Further, the Vice Chancellor determined that a majority of the board faced a substantial threat of liability and would be incapable of disinterestedly considering a demand, rendering it futile. The remainder of defendants’ motion was denied because it was premised on the same arguments and, thus, “the analysis under Rule 23.1 [was] dispositive.”
A copy of Vice Chancellor Laster’s Opinion is attached.
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