Rappaport v. Scherr
A minority shareholder won a bench-trial judgment against the majority shareholder for breach of fiduciary duty, fraudulent concealment and related claims arising from the concealed $32 million sale of animal hospitals to VCA. The Third District reversed entirely, holding that the derivative plaintiff's admitted failure to make the pre-suit demand required by section 607.07401(2), Florida Statutes (2017), mandated dismissal of the second amended complaint, and that the fee judgment fell with it.
Key facts
- Minority shareholder sued majority shareholder for breach of fiduciary duty and fraudulent concealment arising from a concealed $32 million sale of animal hospitals to VCA.
- The trial court entered judgment for the minority shareholder after a bench trial, awarding damages and attorney's fees.
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Why it matters
This is the clearest Florida appellate statement that, for derivative suits governed by the pre-2020 version of the Business Corporation Act, pre-suit demand was truly universal with no futility exception — and that a… — full analysis with a trial
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