After investigation of plaintiffs’ derivative claims, a special litigation committee (“SLC”) formed by nominal defendant MA Federal, Inc. recommended dismissal of this action. The Court denied the SLC’s motion to dismiss because there were material questions of fact regarding the SLC’s independence, its good faith in investigating the claims, and the reasonableness of its grounds to dismiss. Specifically, the Court focused on, inter alia, the familial and professional relationships between the members of the SLC and defendant Tyrrell, the fact that the SLC members appeared to have reviewed the merits of the claims before the SLC was formed, that the SLC determined that duty of care claims should be dismissed based on Section 102(b)(7) of the DGCL when part of the relief sought was injunctive in nature, and that based on the allegations, the scope of the SLC’s investigation of the duty of loyalty claims was not adequate and the SLC did not have a reasonable basis for its findings.
