New Hampshire
How In re The Home Depot, Inc. Derivative Litigation applies in New Hampshire: state-specific rules, key cases, and bar exam notes for Corporate Law.
New Hampshire law closely follows the principles established in Delaware corporate law, particularly regarding derivative actions and the business judgment rule. In derivative suits, New Hampshire courts typically emphasize the need to establish demand futility and the application of the business judgment rule in determining the validity of directors' actions.
Under New Hampshire RSA 293-A:7.42, a shareholder must demonstrate that a demand upon the board was not made or was futile before pursuing a derivative action.
The court reaffirmed that demand futility is a required element in derivative actions, allowing shareholders to proceed without making an initial demand when a majority of board members are implicated in wrongdoing.
The court highlighted the importance of the business judgment rule, stating that decisions made by board members are presumed valid unless proven otherwise.
New Hampshire's approach aligns with the federal derivative action standards, particularly regarding demand futility and the business judgment rule. However, New Hampshire makes more explicit statutory provisions under RSA 293-A, unlike the federal common law which relies more on case precedent for procedural standards.
Understanding derivative actions and the business judgment rule is crucial for the New Hampshire bar exam, as these principles are frequently tested in corporate law questions.