Citigroup Directors Win Dismissal of Shareholder Derivative Litigation

On May 17, 2011, the United States District Court for the Southern District of New York granted a motion to dismiss shareholder derivative litigation brought against Cravath clients, the Outside Directors of Citigroup Inc. Shareholders alleged breach of fiduciary duty, corporate waste and mismanagement against certain of Citigroup’s current and former directors and officers in connection with Citigroup’s losses on mortgage-backed assets in the second half of 2007.

The Court granted the defendants’ motion to dismiss the original complaint in its entirety in August 2009, but permitted plaintiffs to seek leave to amend. Plaintiffs subsequently filed an amended complaint, repeating its prior claims and adding new claims. On May 17, 2011, the Court granted the defendants’ motion and dismissed, with prejudice, the amended complaint.

The Cravath team included partner Richard W. Clary.