Tag: Issue Preclusion

Court of Chancery Dismisses Complaint Seeking to Enforce a Stockholder’s Section 220 Demand to Inspect the Books and Records of Fannie Mae on Issue Preclusion Grounds

By: David L. Forney and David Valenti

In Pagliara v. Federal National Mortgage Association, C.A. No. 12105-VCMR (Del. Ch. May 31, 2017) the Court of Chancery dismissed a complaint brought by a preferred stockholder of Federal National Mortgage Association (“Fanny Mae”) seeking to enforce his rights under Section 220 of the Delaware General Corporation Law to obtain documents (“Section 220 Demand”) to investigate certain actions of Fannie Mae on issue preclusion grounds.  The Court of Chancery ruled that a prior judgment of the Eastern District of Virginia was preclusive on the dispositive issue of whether Fannie Mae stockholders retained the right to obtain the corporate books and records of Fannie Mae under the Housing and Economic Recovery Act of 2008 (the “HERA”).

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Court of Chancery, Applying Arkansas Law, Precludes Re-Litigation of Demand Futility Issue in the Context of a Derivative Suit Brought by Different Stockholder Plaintiffs

By Josh Gaul and H. Corinne Smith

In In re Wal-Mart Stores, Inc., C.A. No. 7455-CB (Del Ch. May 13, 2016), the Court of Chancery, applying Arkansas law, held that issue preclusion applies to different stockholder plaintiffs in the context of a derivative suit and, therefore, that the Arkansas district court’s holding that demand was not futile precludes re-litigation of the issue in the Delaware court system.

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