On April 22, 2026, Justice Masley of the New York County Commercial Division issued a decision in Mayer v. Goldner, 2026 NY Slip Op. 31753(U), holding that demand futility in a derivative action must be alleged in the complaint and not just in the opposition to the motion to dismiss, explaining:
Defendants object that plaintiff’s derivative action on behalf of the nominal defendants or the Assorted Properties LLCs is deficient because plaintiffs fail to allege a pre-litigation demand pursuant to BCL §626(c) or demand futility. Such a demand relieves courts of unduly intruding into matters of corporate governance by first allowing the directors themselves to address the alleged abuses. Plaintiffs’ failure to serve a pre-litigation demand upon a corporation may be excused if making such a demand would be futile. To be excused, however, plaintiffs must plead with particularity that (1) a majority of the directors are interested in the transaction, or (2) the directors failed to inform themselves to a degree reasonably necessary about the transaction, or (3) the directors failed to exercise their business judgment in approving the transaction. Plaintiffs’ discussion of demand futility in their MOL on reply and in opposition to the cross motion to dismiss is insufficient to assert demand futility. Plaintiffs must allege demand futility in the complaint. Moreover, plaintiffs’ allegations of Sam’s history of bad acts are not sufficient to explain why GCM would necessarily reject such a demand. Sam’s failure to comply with an information subpoena in 2024 does not justify plaintiff’s demand futility argument. Nor does it repair plaintiffs’ failure to allege demand futility in the complaint. Plaintiffs’ failure is particularly confounding since GCM has been under the Bankruptcy Court’s supervision since 2024 and this action was filed in 2025 while the Bankruptcy court was in control of GCM. Plaintiffs fail to explain why they could not have made the demand to the bankruptcy court. Therefore, plaintiffs’ derivative claims are dismissed.
(Internal quotations and citations omitted).