Defendant's motion to dismiss the complaint was granted on the ground that plaintiff lacks standing to assert the claims because they are derivative, not direct. Under New York law, a shareholder lacks standing to pursue a direct cause of action to redress wrongs suffered by the corporation. Such claims must be asserted as derivative claims, for the benefit of the corporation. In determining whether a claim is derivative or direct, a court should consider (1) whether the corporation or the individual shareholders suffered the alleged harm, and (2) whether the corporation or the individual shareholders would receive the benefit of any recovery or other remedy.
Sajust, LLC v. Mendelow, NY Slip Op 05835 (1st Dep't October 26, 2021)
