Arkansas Teacher Retirement System, Below v. Countrywide Financial Corporation, Below

Summary

The court answered the certified question in the negative, holding that shareholders who lose ownership through a merger generally lose standing to pursue derivative claims. The fraud exception applies only when the merger itself was undertaken merely to eliminate derivative standing, not when pre-merger fraud allegedly necessitated or was inseparable from the merger. The court concluded that its earlier discussion of inseparable fraud concerned a possible direct claim and did not expand the derivative-standing exception.