Cambridge Retirement System v. James, C.A. No. 9178-CB (June 28, 2014)
One way to meet the demand excuse requirement to bring a derivative suit is to show that a majority of the board of directors had a personal interest in the transaction under attack. But does that interest have to be material to their financial position? This decision clearly explains that a showing of materiality is NOT required when the directors engaged in self dealing. On the other hand, such a showing of materiality is required when the transaction is with a third party and does not involve a direct benefit to the directors.