ÿWPCÐ3  O}ïåo»ò¬†»—þ,5Ý¢ûö†ûÃ÷º›“P¾`é‰Z… +lýŒ½ÖTLUëÄð‰-hWôj®´“ÇÍ5¬³ï# nÇgëb‰Hæ—¢åTú/Û|Ú¡]·ú—¾s:¢!Ejy|®—Ebvù1,,òÉ¢žmAS:ý\ÿÝž“*bx þUhiØ?÷z Æ ;C™ÎÓ-r´ˆ ²‡üwoMQðøèoØ+•ß U‡êyÊöÃO© ´™,©ÐO×—·`¬ & ~l¸F0Ñ ¸TåÛ¦l&ëÁ·“w5蘒B#ô™Ílç°ƒáýŠ ÙՆΠ¦È\‡æ];hJjW¶÷ÑžZŒ£ª)2 ‚hý‘=LY–ø¦)sÃ)PU/*C(Ba˜¯SÄ®$µ5¨þÆ¢p¼sí;âž©/QoDn\-0â8k´0äîÅ$×¢ômø®4,4Øðý˜!¡‡JÒõÞ£³÷Á.ÇÛõ?ÖLϪVJdk˜Y^¬dÙšót|§¹‹ t¼ë>PÙ ýAŒ­`ËÜñO³|·­ ö4ŒÂKEC/ñ³Žø#5‹ëâÜðÃÐ¥O…f·z¢´Ø+&ºþ™”x±1€ ‰ShNW7—ZUBìn. %2 ¶8 0”î 0‚‚ 0Œ 0” 1U$yÅ‘ 0VÆ× 0 0 0=Ÿ D+Ü AQ«XUè: 0C=Í€QMž*²ÌÜë¨""“%üµ%þ±).¯,ÃÝ, 0Π/n0 0 f~0#Áä0(¥2NÍ2 1uÏ2 72D3^ v3w‚34†3š3 mœ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3œ3 B³3ô\  `*Times New RomanTT«ô\  `*Times New RomanTTôôCô\  PŽ6QôPô\  `*Times New RomanTTXXPô\  PŽ6QXPô\  `*Times New RomanTTŠŠWô\  PŽ6QŠP<þ6X9`("Courier NewTTTTŠŠ‚þ6X@ÉDQŠ@<þ6X9`("Courier NewTTTTXXxþ6X@ÉDQX@ô\  `*Times New RomanTTÂÂ<ô\  PŽ6QÂPô' Ô 4SEKUK GLOBAL ENTERPRISES 2 thomast0thomast .   H&&ÿÿ4HypertextHypertextÔ  ÔÔ  ÔÔ ÿ ÔòòóóÔ  ÔÔ  ÔÔ  Ô@! ÿÿ0Level 1Level 1Ó  ÓÔ  ÔÔ  ÔÔ  ÔÔ  ÔÓ  Ó`ÿÿ:footnote reffootnote referenceÔ  ÔÔ  ÔÔ  ÔÔ  Ôhÿÿ:Default ParaDefault Paragraph FontÔ  ÔÔ  ÔÔ  ÔÔ  Ô$ÿÿ359=AEIMQ1CCCCCCCC Ö€ Ö »Ý ƒ £)ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  ÝÔ€Š/ˆXX¸$ÔÓÈÓÔ€ôUgòˆŠ/ÔÌ߀WGCz h x p€ €@X@ÿE°xxÈxȰxxÈßâ °±°±°(#°(#â°â °(#°(#°±°±âÓÈÓÔ€Š/ˆòôUgÔÌÔ€X¸$XˆŠ/Ô(Y2£$©©Ý ƒ#L°!ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  ݃ Level 1 Level 2 Level 3 Level 4 Level 5(Y2£$¢¢Ý ƒ#L°!ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  Ý(Y2£$££Ý ƒ#L°!ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  Ý(ÿÿ$””Ú  ÚÚ  Ú'dxd Cþÿ<< cÿÿ ¡Ý ƒ£"ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  ÝÓÓÓ  ÓÔ@  ÔÚ  Ú2Ú  ÚÔA  Ô<þ6X9`("Courier NewTT(ÿÿ$òòÚ  ÚÚ  Úóó ÃÝ ƒ#L°!ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  ÝÔ€Š/ˆXX¸$ÔÝ‚ÿÿÿÝÔ  ÔÔ  ÔÝ  Ýà  àÔ€X¸$XˆŠ/Ôòòò…òÚ  Ú1Ú  Úó…óóóÝ‚ÿÿÿxƒ#ÝÔ  ÔÔ  ÔÝ  ÝOn€October€16,€2003,€Plaintiff€Sekuk€Global€Enterprises€Profit€Sharing€Plan€filed€aÐ ° Ðcomplaint.€€On€October€27,€2003,€Charles€D.€Hoffman€and€Lydia€J.€Hoffman€filed€a€complaintÐ xÈ Ðand€on€October€30,€2003,€Roberta€Chirko€filed€her€complaint.€€On€October€31,€2003,€the€casesÐ @ Ðwere€designated€for€the€Business€and€Technology€Case€Management€Program. GÝ ƒ#L°!ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  ÝÔ€Š/ˆXX¸$ÔÝ‚ÿÿÿÝÔ  ÔÔ  ÔÝ  Ýà  àòòò…òÚ  Ú2Ú  Úó…óóóÝ‚ÿÿÿxƒ#ÝÔ  ÔÔ  ÔÝ  Ý€The€first€of€several€shareholder€derivative€suits€in€response€to€the€sale€of€certainÐ ° Ðindustrial€properties€to€the€Rechlers€was€filed€in€the€Supreme€Court€of€New€York,€CountyÐ ˆØ Ðof€Nassau,€on€September€16,€2003.€€òòLowinger€v.€Rechler,€et€al.óó,€Index€No.€03„014162Ð `° Ð(Warshawsky,€J.).€€Two€additional€suits€were€filed€in€Supreme€Court€of€New€York,Ð 8ˆ ÐCounty€of€Suffolk,€on€October€2€and€3,€2003.€€There€are€three€consolidated€actionsÐ ` Ðpending€in€the€United€States€District€Court€for€the€Eastern€District€of€New€York,€the€firstÐ è8 Ðof€which€was€filed€on€September€26,€2003.€€òòTucker,€et€al.€v.€Rechler,€et€al.óó,€Case€Nos.€03„Ð À  ÐCV„4917,€03„CV„4917,€03„CV„5008€and€03„CV„5718€(Platt,€J.).€FN_B01212Document1zzFN_B01111 ÂÝ ƒ#L°!ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  ÝÔ€Š/ˆXX¸$ÔÒ³°ÒÝ‚ÿÿÿÝÔ  ÔÔ  ÔÝ  ÝÒ¶³Òà  àÔ€X¸$XˆŠ/Ôòòò…òÚ  Ú3Ú  Úó…óóóÝ‚ÿÿÿ†ƒ#ÝÔ  ÔÔ  ÔÝ  ÝBecause€the€requirement€for€pleading€and€proving€demand€futility€articulated€inÐ ° ÐòòWerbowsky€óóis€so€recent,€there€are€few€Maryland€cases€applying€it.€€The€Delaware€cases€holdingÐ xÈ Ðthat€a€demand€was€not€futile€are€helpful€because€the€Delaware€standard€is€more€permissive€andÐ @ Ðexcuses€a€demand€where€Maryland€would€not.€€Delaware€looks€to€determine€if€the€facts€allegedÐ X Ðcreate€a€reasonable€doubt€that€Ô€X ÖXXX¸$ÔAÔ€X¸$XXX ÖÔ(1)€the€directors€are€disinterested€and€independent,€and€(2)€theÐ Ð  Ðchallenged€transaction€was€the€product€of€a€valid€exercise€of€business€judgment.Ô€X ÖXXX¸$Ô@Ô€X¸$XXX ÖÔ€€òòWerbowskyóó,Ð ¢ò Ð362€Md.€at€593€òòciting€Pogostin€v.€Rice,óó€480€A.2d€619,€624€(Del.1984). áÝ ƒ#L°!ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  ÝÔ€Š/ˆXX¸$ÔÒ³°ÒÝ‚ÿÿÿÝÔ  ÔÔ  ÔÝ  ÝÒ¶³Òà  àòòò…òÚ  Ú4Ú  Úó…óóóÝ‚ÿÿÿ†ƒ#ÝÔ  ÔÔ  ÔÝ  ÝPlaintiffs€allegation€that€Ô€X¸$XˆŠ/ÔÔ€X ÖXXX¸$ÔAÔ€X¸$XXX ÖÔfrom€at€least€1988,€Klein€actedÔ€X ÖXXX¸$Ô@Ô€X¸$XXX ÖÔ€as€counsel,€makes€itÐ ° Ðimpossible€to€determine€if€Plaintiffs€are€alleging€that€he€is€still€counsel.€€Thus,€for€purposes€ofÐ ŽÞ Ðthis€motion,€the€Court€assumes€that€he€still€is€counsel. Ñ ° ÑÑ  Ñ òÝ ƒ#L°!ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  ÝÔ€Š/ˆXX¸$ÔÒ«°ÒÒ³°ÒÝ‚ÿÿÿÝÔ  ÔÔ  ÔÝ  ÝÒ¶³Òà  àÔ€X¸$XˆŠ/Ôòòò…òÚ  Ú5Ú  Úó…óóóÝ‚ÿÿÿ”ƒ#ÝÔ  ÔÔ  ÔÝ  ÝPlaintiffs€claim€that€one€of€the€DefendantsÔ€X ÖXXX¸$Ô=Ô€X¸$XXX ÖÔ€attorneys€represented€to€the€Court€at€theÐ ° ÐNovember€4,€2003€scheduling€conference€that€absent€an€injunction,€the€Transaction€wasÐ ‚Ò Ðscheduled€to€close€immediately€due€to€the€necessity€to€use€the€funds€to€purchase€1185.€Ð Jš ÐDefendants€dispute€this€allegation.€€Because€this€was€not€a€hearing,€and€no€request€was€made,€theÐ b Ðscheduling€conference€was€not€recorded.€€For€the€reasons€discussed€above,€the€Court€finds€itÐ Ú* Ðunnecessary€to€decide€what€was€or€was€not€said. ôÝ ƒ#L°!ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  ÝÔ€Š/ˆXX¸$ÔÒ«°ÒÒ³°ÒÝ‚ÿÿÿÝÔ  ÔÔ  ÔÝ  ÝÒ¶³Òà  àòòò…òÚ  Ú6Ú  Úó…óóóÝ‚ÿÿÿ”ƒ#ÝÔ  ÔÔ  ÔÝ  ÝFrankly€it€would€be€difficult€to€conclude€that€Defendants€were€Ô€X¸$XˆŠ/ÔÔ€X ÖXXX¸$ÔAÔ€X¸$XXX ÖÔirretrievablyÐ ° ÐcommittedÔ€X ÖXXX¸$Ô@Ô€X¸$XXX ÖÔ€even€if€there€had€been€a€contract€to€purchase€1185€signed€simultaneously€with€theÐ ŽÞ Ðcontract€to€enter€into€the€Transaction.€€Contracts€are€broken€regularly.Document1zzSDUNumber23 ¹Ý ƒ#L°!ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  ÝÔ€Š/ˆXX¸$ÔÒ«°ÒÒ³°ÒÝ‚ÿÿÿÝÔ  ÔÔ  ÔÝ  ÝÒ¶³Òà  àòòò…òÚ  Ú7Ú  Úó…óóóÝ‚ÿÿÿ”ƒ#ÝÔ  ÔÔ  ÔÝ  ÝThe€Family€Group€is€members€of€the€Rechler€family€who,€according€to€theÐ ° Ðallegations€in€the€Complaint,€€Ô€X¸$XˆŠ/ÔÔ€X ÖXXX¸$ÔAÔ€X¸$XXX ÖÔcontrolledÔ€X ÖXXX¸$Ô@Ô€X¸$XXX ÖÔ€Reckson€AssociatesÔ€X ÖXXX¸$Ô=Ô€X¸$XXX ÖÔ€Board.(2%Q$¤¤Ý ƒ#L°!ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  ÝÓÓÔ€¸$XXX¸$ÔòòÚ  Ú0Ú  Úóó3|x (>L°$¡¡Ô€X¸$XòôÔÔ€X¸$XXX¸$Ô˜HP LaserJet 5MÈ,,,,È0!3#37=CIQYag­­1.a.i.(1)(a)(i)1)a)'i)l¡'1â aaì0yweb0ÿU‹ÿÀÀÀ dÝ ƒ#L°!ÝÔ€X¸$XòôÔÔ€X¸$XXX¸$ÔÝ  ÝÔ_ÔÔ€Š/ˆXX¸$ÔÔ  ÔSEKUK€GLOBAL€ENTERPRISESà À à*à  àIN€THEÐ ° ÐPROFIT€SHARING€PLAN,Ð ˆØ Ðà  àà ` àà ¸ àòòPlaintiffóó,à h àà À à*à  àCIRCUIT€COURTÐ `° Ðà  àà ` àà ¸ àÌà  à€à ` àà ¸ àà  àà h àà À à*à  àFORÐ ` Ðà  àvs.Ð è8 Ðà0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#à*à  àBALTIMORE€CITYÐÀ À(#À(# Ðà0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#àà h àà  àà ¸ àà ` àà  àà ° àHERVE€A.€KEVENIDES,à  àet.€alà h àà À àà  àCase€No.:€24„C„03„007496И èÀ(#À(# Ðà  àà ` àà ¸ àòòDefendantsóó,à h àà À à*Ð p À Ðà0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àÐ h(#h(# Ðà0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#à*Ð p À(#À(# Є„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„XÐ ø H  ÐÌà0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#àà h àà  àà ¸ àà ` àà  àà ° àCHARLES€D.€HOFFMAN,€et€al.,à h à*Шø À(#À(# Ðà  àà ` àòòPlaintiffsóó,Ð €Ð  ÐÝ‚ÿÿÿÝÓ  ÓÔ  ÔÔ  ÔÝ  ÝÓ€ (ÿÿ43'ÓÓ  Óà0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#àà0À(#À(#àà À àCase€No.:€24„C„03„007876ÐX¨ (#(# ÐÝ‚ÿÿÿƒ#ÝÔ  ÔÔ  ÔÓ  ÓÝ  Ýà  àv.Ð 0€  Ðà0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#àà h àà  àà ¸ àà ` àà  àà ° àDONALD€J.€RECHLER,€et€al.,à h àà À à*ÐXÀ(#À(# Ðà  àà ` àòòDefendantsóó.Ð à0 Є„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„„XÐ ¸ ÐROBETA€CHIRKO,€Ð à Ðà0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#àà h àà  àà ¸ àà ` àòòPlaintiffóó,à  àà h àà À à*Ðh¸À(#À(# Ðà  àv.Ð @ ÐRECKSON€ASSOCIATES€REALITY€à À à*à  àCase€No.:€24„C„03„008010Ð h ÐCORP.€,€et€al.,Ð ð@ Ðà  àà ` àòòDefendants.óóà  àà h àà À à*Ð È ЀÌà  àà ` àà ¸ à*à  à*à h à*à À à*à  à*à p à*à È à*ò òòòÐ xÈ ÐÓ  ÓMEMORANDUM€OPINIONó óóóÐ P  ÐÌÑ€ ÑÓÌÌÓÓ  Óà  àThis€is€a€shareholder€derivative€action€challenging€the€business€judgment€of€theÐ P ÐIndependent€Directors€in€approving€a€series€of€transactions€involving€the€sale€of€a€New€YorkÐ „Ô  Ðindustrial€portfolio€to€members€of€the€Rechler€family€(herein€referred€to€as€theÐ !X" ÐÔ€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔTransactionÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô).€€The€action€is€the€consolidation€of€three€lawsuits€brought€on€behalf€ofÐ Œ"Ü$ Ðshareholders€of€Reckson€Associates€Reality€Corp.€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔReckson€AssociatesÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô)€allegingÐ &$v& Ðsubstantially€the€same€facts€and€claims.Ý‚ÿÿÿÝÔ  ÔÔ  ÔÝ  ÝÑÈÑ׃×Ý ƒÿÿÝòòÚ  Ú1Ú  ÚóóÝ  Ý×  ×€€On€October€29,€2003,€Plaintiff€Sekuk€GlobalÐ À%!( ÐEnterprises€Profit€Sharing€Plan€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔSekukÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô),€which€brought€the€first€of€these€actions,€€movedÐ D'”"* Ðfor€a€temporary€restraining€order€or€preliminary€injunction€to€enjoin€the€Transaction€butÐ Þ(.$, ÐÑ Ñâ  âÖ€ ÿÿÖâ  âÑ  Ñdecided€not€to€forward€on€the€motion.Ð ° Ðà  àOn€January€20,€2004,€Plaintiffs€in€all€the€actions€filed€a€Consolidated€AmendedÐ 4„ ÐComplaint€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔComplaintÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô)€alleging€that€Defendants€breached€their€fiduciary€duties€of€care,Ð ¸ Ðreasonable€inquiry,€oversight,€good€faith,€supervision€and€loyalty.Ý‚ÿÿÿÝÔ  ÔÔ  ÔÝ  Ý׃×Ý ƒÿÿÝòòÚ  Ú2Ú  ÚóóÝ  Ý×  ×€€The€IndependentÐ R ¢ ÐDirectors,€Chairman€of€the€Board€Emeritusò ò€ó óWalter€Gross,€and€nominal€defendant€RecksonÐ Ö & ÐAssociates€Realty€Corp.€have€filed€Motions€to€Dismiss€alleging€that€all€of€the€claims€areÐ ^ ®  Ðderivative€and€that€Plaintiffs€failed€to€make€a€demand€on€the€Board€to€take€remedial€actionÐ â 2  Ðbefore€filing€suit€and€failed€to€allege€facts€to€show€that€making€a€demand€would€have€beenÐ f¶  Ðfutile.€Ð ê:  ÐÓ  Óò òòòSTATEMENT€OF€FACTSó óóóÐ n¾  ÐÓ  Óà  àReckson€Associates,€along€with€Reckson€Operating€Partnership,€L.P.€and€its€affiliates,Ð òB Ðoperates€as€a€real€estate€investment€trust€that€owns,€develops€and€manages€offices€andÐ vÆ Ðindustrial€properties€in€New€York€Tri„State€area.€€The€Rechler€family€founded€RecksonÐ úJ ÐAssociates€which€is€a€Maryland€Corporation.€€Plaintiffs€Sekuk,€Charles€D.€and€Lydia€J.Ð ~Î ÐHoffman,€and€Roberta€Chirko€have€owned€equity€securities€in€Reckson€Associates€at€allÐ R Ðtimes€relevant€to€this€action.€€Ð †Ö ÐÒ¬°Òà  àAs€of€September€10,€2003,€Reckson€Associates€had€eleven€voting€directors.€€Five€ofÐ  Z  Ðthose€directors€Ô€Šš2ˆˆŠ/ÔBÔ€Š/ˆˆŠš2Ô€Donald€Rechler,€Gregg€Rechler,€Roger€Rechler,€Mitchell€Rechler,€and€ScottÐ ŽÞ" ÐRechler€(the€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔRechler€DefendantsÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô)€Ô€Šš2ˆˆŠ/ÔBÔ€Š/ˆˆŠš2Ô€were€part€of€the€Rechler€family€and€served€asÐ ( x$ Ðexecutive€officers€of€Reckson€Associates.€€The€Independent€Directors,€who€were€notÐ ° Ðmembers€of€the€Rechler€family,€included€Ronald€H.€Manaker€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔMenakerÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô),€Peter€QuickÐ 4„ Ð(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔQuickÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô),€Herve€A.€Kevenides€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔKevenidesÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô),€Conrad€D.€Stephenson€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔStephensonÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô),Ð Î ÐLewis€S.€Ranieri€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔRanieriÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô),€and€John€V.€N.€Klein€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔKleinÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô),€and€Walter€Gross€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔGrossÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô),Ð h ¸ Ðwho€has€served€as€Chairman€of€the€Board€Emeritus€since€the€formation€of€RecksonÐ  R ÐAssociates.€€Thus€the€Independent€Directors€made€up€a€majority€of€the€eleven„member€BoardÐ † Ö  Ðof€Directors.Ð  Z  ÐÒ³¬Òà  àOn€September€10,€2003,€Reckson€Associates€€announced€a€strategic€plan€that€involvedÐ ŽÞ  Ðthe€sale€of€certain€industrial€properties€to€the€Rechler€family,€the€resignation€of€severalÐ b  ÐRechler€family€members€from€executive€management€and€board€positions,€and€various€otherÐ –æ  Ðcorporate€governance€changes.€€In€connection€with€this€strategic€plan,€the€Reckson€OperatingÐ j ÐPartnership€agreed€to€sell€95€industrial€properties€on€Long€Island€(the€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔindustrialÐ žî ÐpropertiesÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô)€to€the€Rechler€family€for€approximately€$315.5€million€Ô€Šš2ˆˆŠ/ÔBÔ€Š/ˆˆŠš2Ô€roughly€$225.1€millionÐ 8ˆ Ðin€cash€and€debt€assumption€and€$90.4€million€in€Reckson€Operating€Partnership€unitsÐ Ò" Ð(3,932,111€units,€valued€by€Citigroup€at€$23,00.€per€unit).€€The€Transaction€€provided€thatÐ V¦ Ðthe€Rechler€family€would€no€longer€own€any€Reckson€Operating€Partnership€units.òò€€óóInÐ Ú* Ðaddition,€Gregg,€Roger,€and€Mitchell€Rechler€were€to€resign€as€officers€and€directors,€andÐ ^®  ÐDonald€Rechler€was€to€resign€from€management€but€still€serve€as€non„executive€ChairmanÐ â2" Ðof€the€Board.€€Reckson€Associates€was€to€settle€some€pre„existing€financial€obligations€to€theÐ f ¶$ Ðfour€resigning€Rechlers.€Ð ê!:& Ðà  àThe€Transaction€€was€reviewed€by€the€Independent€Directors,€who,€in€turn,€engagedÐ n#¾( ÐCitigroup€to€provide€a€detailed€fairness€opinion€for€a€special€committee€of€the€Board.€€All€ofÐ ò$B * Ðthe€Directors€voted€to€approve€the€Transaction.€Ð v&Æ!, Ðà@êê#êàò òòòDISCUSSIONó óóó€€€€ˆÐ ú'J#. Ðà  àÔ€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôò òIn€reviewing€the€grant€of€a€motion€to€dismiss€pursuant€to€Maryland€Rule€2„Ð ‚)Ò$0 Ð322(b),ó óÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ôò ò€the€Court€must€assume€ó óÔ€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôò òthe€truth€of€all€well€pleaded€facts€and€all€inferencesÐ ° Ðthat€can€reasonably€be€drawn€from€[them].ó óÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ôò ò€€òòBennett€Heating€&€Air€Conditioning,€Inc.Ð M Ðv.€Nations€Bankóó,€103€Md.€App.€749€(1995),€òòrevó óÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôò òd€in€part€on€other€groundsóó,€342€Md.€169Ð ê: Ð(1996).€€ó óÔ€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôò òAny€ambiguity€or€want€of€certainty€in€[the]€allegations€must€be€construedÐ ‡ × Ðagainst€the€pleader,ó óÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ôò ò€€òòManikhi€v.€Mass€Transit€Admin.óó,€360€Md.€333,345€(2000)€(internalÐ $ t Ðcitations€omitted)€because€in€ó óÔ€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôò òmoving€to€dismiss,€a€defendant€is€asserting€that,€even€ifÐ Á   Ðthe€allegations€of€the€complaint€are€true,€the€plaintiff€is€not€entitled€to€relief€as€a€matterÐ ^®  Ðof€law.ó óÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ôò ò€òòHrehorovich€v.€Harbor€Hosp.€Ctróó.,òò€93€Md.€App.€772,€784€(1992).€€óóó óÔ€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôò òThus,€inÐ â2  Ðconsidering€a€motion€to€dismissòò€óófor€failure€to€state€a€claim,€the€circuit€court€examinesÐ Ï  Ðonly€the€sufficiency€of€the€pleading.ó óÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ôò ò€òòId.óó€€ó óÔ€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôò òThe€complaint€should€not€be€dismissedÐ S Ðunless€it€appears€that€no€set€of€facts€can€be€proven€in€support€of€the€claim€set€forthÐ  ð Ðtherein.ó óÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ôò ò€€òòBennett,€óó103€Md.€App.€at€749.€€€ó óThus,€all€of€the€facts€considered€in€this€OpinionÐ $t Ðare€drawn€from€the€Complaint€and€the€Court€did€not€consider€any€of€the€documents€orÐ Á Ðaffidavits€filed€by€any€of€the€parties.Ð E• Ðà  àIt€is€well„established€that€courts€will€not€ordinarily€consider€a€derivative€action€by€aÐ É Ðshareholder€on€behalf€of€a€corporation€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôuntil€it€appears€that€the€intra€corporate€remedies€haveÐ M Ðbeen€unsuccessfully€pursued€by€the€complaining€stockholder,Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€which€means€that€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔgenerallyÐ ç7  Ðspeaking,€the€complaining€stockholder€must€make€a€demand€upon€the€corporation€itself€toÐ Ñ" Ðcommence€the€action,€and€show€that€this€demand€has€been€refused€or€ignored.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòParish€v.Ð !U$ ÐMilk€Producers€Assn.óó,€250€Md.€24,€81„82€(1968).€€Because€no€such€demand€was€made€byÐ Ÿ"ï& ÐPlaintiffs,€Defendants€urge€that€the€complaint€must€be€dismissed.€€Ð #$s( Ðà  àNoting€that€a€shareholder€derivative€suit€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ônecessarily€intrudes€upon€the€managerialÐ §%÷ * Ðprerogatives€ordinarily€vested€in€the€directors,Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€and€because€such€actions€may€be€abused€byÐ A'‘", ÐÔ€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôdisgruntled€shareholders,Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€the€Court€of€Appeals€recently€adopted€a€strict€pre„suit€demandÐ Û(+$. Ðrequirement€for€derivative€actions.€€òòWerbowsky€v.€Collombò ò,óóó ó€362€Md.€581,€600ò ò€ó ó(2001).€€TheÐ ° ÐCourt€noted€that€in€most€instances,€the€pre„suit€demand€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôis€not€an€onerous€requirementÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€andÐ 8ˆ Ðexplained€that€the€demand€requirement€provides€an€opportunity€for€the€directorsÔ€Šš2ˆˆŠ/ÔBAÔ€Š/ˆˆŠš2ÔevenÐ Ò" Ðinterested,€non„independent€directorsÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€to€consider,€or€reconsider€the€disputed€issue.€€òòId.óó€atÐ l ¼ Ð619.€€After€receiving€a€demand,€the€Directors€may€decide€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôto€seek€the€advice€of€a€specialÐ  V Ðlitigation€committee€of€independent€directors€.€.€.Ô € Ô€or€they€may€decide€.€.€.€€to€accede€to€theÐ   ð  Ðdemand€rather€than€risk€embarrassing€litigation.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòId.óó€at€619.€€Ð $t  Ðà  àThe€Court€noted€that€a€futility€exception€often€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôassures€extensive€and€expensiveÐ ¾  Ðjudicial€wrangling€over€a€peripheral€issue€that€may€result€in€preliminary€determinationsÐ X¨  Ðregarding€director€culpability€that,€after€trial€on€the€merits,€turn€out€to€be€unsupportable,Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€òòid.óó€Ð Ü, Ðat€600„02,€whereas€if€a€demand€is€made€and€refused,€it€can€be€reviewed€under€the€€businessÐ vÆ Ðjudgment€rule€standard.€€òòId.óó€€In€recognition€of€this€fact,€the€Court€crafted€a€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôvery€limitedÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2ԀРúJ Ðexception,€òòid.óó,€and€held€that€a€demand€is€futile€only€when€the€allegations€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔclearlyÐ ”ä Ðdemonstrate,€in€a€very€particular€mannerÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€that:Ð .~ ÐÓÌÌÓà8  àà8` Í Í à(1)€making€a€demand,€or€the€delay€in€waiting€for€a€response€toÐ È Ðthe€demand,€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôwould€cause€òòirreparable€harm€to€theÐ  ð Ðcorporation;óóÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€or€Ð„Ô` u` u ÐÌà8  àà8` Í Í à(2)ò ò€ó óa€majority€of€the€directorsòòò ò€óóó óareòò€so€personally€and€directlyÐ @  Ðconflicted€or€committed€óóto€the€disputed€decision€that€they€cannotÐ j! Ðreasonably€be€expected€to€respond€to€a€demand€in€good€faith€andÐ òB" Ðin€accordance€with€the€business€judgment€rule.òòò ò€óóó ó€òòÐÊ #` u` u ÐÌÓÌÌÓId.€at€óó620.€(emphasis€added).€Ð |"Ì% Ðà  àIn€òòWerbowskyóó,€the€Court€affirmed€the€trial€courtÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€grant€of€summary€judgment€on€theÐ $P' Ðbasis€that€a€demand€was€not€excused.€€Although€òòWerbowskyóó€involved€a€summary€judgment,Ð š%ê ) Ðthe€Court€made€clear€that€the€same€standard€applies€to€a€motion€to€dismiss:€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ô[o]bviously,€ifÐ 'n"+ Ðthe€complaint€fails€to€allege€sufficient€facts€which,€if€true,€would€demonstrate€the€futility€ofÐ ¸($- Ða€demand,€it€is€entirely€appropriate€to€terminate€the€action€on€a€motion€to€dismiss.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòId.€óóatÐ ° Ð620„21.Ð Jš Ðà  àThus€in€determining€whether€to€grant€the€motion€to€dismiss,€the€Court€must€determineÐ Î Ðwhether€Plaintiffsò ò€ó óhave€alleged€facts€that€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôclearly€demonstrate,€in€a€very€particular€mannerÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2ÔÐ R ¢ Ðthat:€(1)€the€issuance€of€a€demand,€or€the€delay€in€waiting€for€a€response€to€the€demand€wouldÐ ï ? Ðhave€caused€irreparable€harm€to€Reckson€Associates,€or€€(2)€a€majority€of€the€directors€wereÐ s à  ÐÔ€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôso€personally€and€directly€conflicted€or€committed€to€the€decision...that€they€could€not€haveÐ ÷ G  Ðreasonably€been€expected€to€respond€to€a€demand€in€good€faith€and€within€the€ambit€of€theÐ ‘á  Ðbusiness€judgment€rule.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòIdóó.€at€620.€Ð e  ÐÐ  ¯ÿ  ÐÓÌÌÓà0  àà ° àò òòò1.€à  àPlaintiffsóóÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôòò€Allegations€Fail€to€Clearly€Demonstrate€That€Making€aÐ ° ÐDemand€or€Awaiting€the€BoardóóÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôòòs€Response€Would€Have€CausedÐ –æ ÐIrreparable€Harm.ó óóó€€Ð|Ì%#%# ÐÌÓÌÌÓà  àIt€is€unclear€whether€Plaintiffs€contend€that€making€a€demand,€or€awaiting€theÐ .~ ÐBoardÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€€response€would€have€caused€irreparable€harm,€but€it€is€clear€that€the€ComplaintÐ ²  Ðfails€to€clearly€demonstrate€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôirreparable€harm.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€Parties€may€not€create€their€own€irreparableÐ L œ Ðharm.€€òòSee,€e.g.,€Quince€Orchard€Valley€Citizens€AssÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôn€v.€Hodel,óó€872€F.2d€75,79€(4òòthóó€Cir.Ð æ 6  Ð1989)€(affirming€district€courtÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€denial€of€a€preliminary€injunction€because€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ômuch€ofÐ €Ð  Ð[plaintiffsÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô]€potential€harm€was€a€product€of€its€own€delay€in€pursuing€this€action.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô).€€òòSeeÐ j  Ðalso,€e.g.,€Vantico€Holdings€S.A.€v.€Apollo€Mgmtóó,€247€F.€Supp.€2d€437,€454€(S.D.N.Y.€2003)Ð ´  Ð(asserting€that€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ô[plaintiff]€cannot€rely€on€its€own€actions€to€create€the€risk€of€irreparableÐ 8ˆ Ðinjury€which€it€then€seeks€to€avoid€by€the€issuance€of€a€preliminary€injunction.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô);òò€€MinzerÐ Ò" Ðv.€Keeganóó,€1997€U.S.€Dist€LEXIS€16445,€at€*18€(E.D.N.Y.€Sept.€22,€1997)€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔBecauseÐ l¼ Ðpreliminary€injunctions€are€predicated€upon€Ô€Šš2ˆˆŠ/Ô>Ô€Š/ˆˆŠš2Ôurgent€need€for€speedy€action,Ô€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€delay€inÐ V Ðseeking€the€remedy€suggests€that€the€remedy€is€not€really€needed€or€that€the€harm€is€not€reallyÐ  ð Ðirreparable.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô)€(citations€omitted).€€Ð $t Ðà  àThe€sale€of€the€industrial€properties€was€announced€on€September€10,€2003,€with€anÐ ¾ Ðexpected€closing€date€in€the€fourth€quarter€of€2003.€€Plaintiffs€could€have€made€a€demand€onÐ B’  Ðthe€Board€on€September€11th€or€shortly€thereafter.€€€Instead€Plaintiffs€filed€the€first€of€theseÐ Æ" Ðconsolidated€cases€on€October€16òòthóó,€over€five€weeks€later€and€over€four€weeks€after€anotherÐ J!š$ ÐReckson€Associates€shareholder€brought€virtually€the€same€derivative€suit€in€New€York€(€òòseeóóÐ Î"& Ðnote€2.).€€When€Plaintiffs€decided€to€not€go€forward€on€their€request€for€injunctive€relief,€theyÐ R$¢( Ðeffectively€conceded€that€there€was€no€irreparable€harm.€Ð Ö%&!* Ðà  àFinally,€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôirreparable€injury€is€suffered€whenever€monetary€damages€are€difficult€toÐ Z'ª", Ðascertain€or€are€otherwise€inadequate,€Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€and€Plaintiffs€have€failed€to€allege€that€they€couldÐ ô(D$. Ðnot€be€adequately€compensated€for€any€breach€through€an€award€of€money€damages.€Ð ° ÐòòChestnut€Real€Estate€PÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôship€v.€Huberóó,€148€Md.€App.€190,€205€(2002)€(citation€omitted)).€Ð 4„ ÐòòSee€also€Coster€v.€Department€of€Personnelóó,€36€Md.€App.€523,€526€(1977)€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôan€injury€isÐ Î Ðirreparable€.€.€.€where€.€.€.€it€cannot€be€readily,€adequately,€and€completely€compensated€forÐ h ¸ Ðwith€moneyÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô)€(citation€omitted).€€€à À àÐ ì < Ðà  àIn€sum,€Plaintiffs€have€failed€to€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôclearly€demonstrate,€in€a€very€particular€mannerÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2ÔÐ † Ö  Ðthat€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôa€demand,€or€a€delay€in€awaiting€a€response€to€a€demand,€would€[have]€cause[d]Ð  p  Ðirreparable€harm€to€the€corporation.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòWerbowskyóó,€362€Md.€at€620.€à  àÐ º  ÐÝ‚ÿÿÿÝÓ  ÓÔ  ÔÔ  ÔÝ  ÝÓ  Óà0  àà ° à2.à  àPlaintiffsÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€Allegations€Fail€to€Clearly€Demonstrate€That€a€Majority€of€the€DirectorsÐ T¤  ÐAre€So€Personally€and€Directly€Conflicted€That€They€Could€Not€Have€ReasonablyÐ î> ÐBeen€Expected€to€Respond€to€a€Demand€in€Good€Faith€and€Within€the€Ambit€of€theÐ r ÐBusiness€Judgment€Rule.ÐöF%#%# ÐÝ‚ÿÿÿ afterÝÔ  ÔÔ  ÔÓ  ÓÝ  Ýà  àIn€support€of€their€argument€that€Defendants€were€conflicted,€Plaintiffs€allege€thatÐ zÊ ÐDefendants€were€hand€picked€to€sit€on€the€Board€by€the€Rechlers;€had€social€and€businessÐ þN Ðrelationships€with€the€Rechlers;€had€a€history€of€taking€steps€to€protect€the€interests€of€theÐ ‚Ò ÐRechlers€at€the€expense€Reckson€Associates;€and€that€after€approval€of€the€Transaction,€theÐ V ÐBoard€instituted€a€number€of€corporate€governance€changes€to€protect€the€Company€fromÐ ŠÚ  Ðthese€alleged€conflicts.Ð ^" Ðà  àòòWerbowskyóó€makes€clear€that€a€demand€will€not€be€excused€lightly.€€Thus€a€conflict€isÐ ’ â$ Ðnot€shown€simply€by€alleging€that€the€directors€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôwere€chosen€...€at€the€behest€of€controllingÐ "f& Ðstockholders.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€362€Md.€at€618.€€Nor€will€it€be€excused€because€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôa€majority€of€the€directorsÐ °#( Ðapproved€or€participated€in€some€way€in€the€challenged€transaction€or€decision,Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€or€basedÐ J%š * Ðon€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôallegations€that€[the€directors]€€are€conflicted€or€are€controlled€by€other€conflictedÐ ä&4", Ðpersons.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòIdóó.€€In€fact€a€simple€allegation€that€the€directors€will€be€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôhostile€to€the€actionÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€isÐ ~(Î#. Ðnot€sufficient€to€excuse€a€demand.€€òòIdóó.€€Because€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ô[d]irectors€are€presumed€to€act€properly€andÐ ° Ðin€the€best€interest€of€the€corporation,€Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€òòid.óó€at€618„19,€a€conflict€will€not€be€found€based€onÐ Jš ÐÔ€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ônon-specific€or€speculative€allegations€of€wrongdoing.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòIdóó.€at€619.Ô € ÔÐ ä4 Ðà  àAs€the€Court€noted€in€òòDanielewicz€v.€Arnoldóó,€137€Md.€App.€601,€631€(2001),Ð ~ Î ÐòòWerbowsky€óórequires€that€a€complaint€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôdemonstrate,€[any€alleged€conflict€by€the€directors]€Ð  R Ð...€Ô€Šš2ˆˆŠ/Ô>Ô€Š/ˆˆŠš2Ôòòin€a€very€particular€manner.Ô€Šš2ˆˆŠ/Ô=óó@Ô€Š/ˆˆŠš2Ô€(emphasis€added).€€In€òòDanielewiczóó,€the€directors€wereÐ œ ì  Ðthe€plaintiffÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€husband,€a€director€the€Court€assumed€òòarguendoóó€was€conflicted,€and€theÐ 6†  Ðalleged€conflicted€directorÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€son.€€òòId.óó€at€629.€€The€Court€held€that€the€allegations€of€a€conflictÐ Ð  Ðwere€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôconjecture€and€speculation.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòIdóó.€at€631.€€The€Court€assumed€the€plaintiffÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€husbandÐ jº  Ðwould€have€responded€to€her€demand,€and€in€reference€to€the€conflicted€directorÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€son€heldÐ T Ðthat€the€plaintiff€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôhas€not€presented€sufficient€evidence€indicating€that€he€would€not€haveÐ žî Ðresponded€to€[the€plaintiffÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs]€demand.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòIdóó.€at€631.€€Thus€evidence€of€familial€relations,Ð 8ˆ Ðwithout€more,€is€not€sufficient€to€excuse€a€demand.€Ð Ò" Ðà  àNor€is€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ô[e]vidence€of€personal€and/or€business€relationshipsÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€sufficient€to€excuse€aÐ V¦ Ðdemand€even€under€the€more€permissive€Delaware€standard.Ý‚ÿÿÿÝÔ  ÔÔ  ÔÝ  Ý׃×Ý ƒÿÿÝòòÚ  Ú3Ú  ÚóóÝ  Ý×  ×€€òòKohls€v.€Duthieóó,€765€A.2dÐ ð@ Ð1274,€1284€(Del.Ch.€2000)€(citation€omitted).€€There€the€Court€held€that€the€fact€that€theÐ tÄ ÐcompanyÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€president,€CEO,€and€inside€director€provided€a€summer€job€to€an€outside€directorÐ øH  Ðwhen€he€was€in€business€school€and€also€played€a€role€in€his€board€appointment,€did€notÐ ’â" Ðshow€that€the€outside€director€lacked€independence.€€òòId.óó€€Nor€was€a€conflict€shown€byÐ !f$ Ðalleging€that€a€director€had€previously€voted€in€favor€of€a€generous€cash€severance€paymentÐ š"ê& Ðthat€was€paid€to€the€CEO,€despite€the€fact€that€the€latter€did€not€leave€or€change€his€job€withÐ ° Ðthe€company.€€òòKohls€v.€Duthieóó,€765€A.2d€772,€781€(Del.€Ch.€2000).€€òòSee€also€Orman€v.Ð 4„ ÐCullman,óó€794€A.2d€5,€28€(Del.€Ch.€2002)€(holding€that€outside€directorÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€former€affiliationÐ ¸ Ðwith€the€underwriter€of€a€companyÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€initial€public€offering€and€its€present€investment€bankÐ R ¢ Ðdid€not€render€director€non„independent).Ð ì < Ðà  àThe€requirement€of€specific€evidence€of€an€actual€conflict€was€recently€reiterated€inÐ p À  ÐòòBeam€v.€Stewartóó,€845€A.2d€1040€(Del.€2004).€€In€rejecting€the€plaintiffÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€argument€that€aÐ ô D  Ðdemand€was€futile€because€of€an€alleged€conflict€the€Court€stated€that€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôto€render€a€directorÐ ŽÞ  Ðunable€to€consider€a€demand,€a€relationship€òòmust€be€of€a€bias„producing€natureóó.€€AllegationsÐ (x  Ðof€mere€personal€friendship€or€a€mere€outside€business€relationship,€standing€alone,€areÐ ¬ü  Ðinsufficient€to€raise€a€reasonable€doubt€about€a€directorÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€independence.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòId.óó€at€1050Ð 0€ Ð(emphasis€added).€€One€of€the€allegations€in€òòBeam€óówas€that€one€of€the€directors€(i)€was€aÐ Ê Ðlong„standing€personal€friend€of€the€controlling€stockholder€and€the€president€and€chiefÐ Nž Ðoperating€officer;€(ii)€had€a€prior€business€relationship€with€the€company€(through€hisÐ Ò" Ðposition€at€Sears,€which€marketed€a€substantial€volume€of€the€companyÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€products);€and€(iii)Ð V¦ Ðwas€recruited€for€the€board€by€a€longtime€personal€friend€of€the€controlling€director.€€òòId.€óóatÐ ð@ Ð1045.€The€Court€held€that€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ô[a]llegations€that€Stewart€[the€controlling€stockholder]€and€theÐ tÄ  Ðother€directors€moved€in€the€same€social€circles,€attended€the€same€weddings,€developedÐ ^" Ðbusiness€relationships€before€joining€the€board,€and€described€each€other€as€Ô€Šš2ˆˆŠ/Ô>Ô€Š/ˆˆŠš2Ôfriends,Ô€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€evenÐ ’ â$ Ðwhen€coupled€with€StewartÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€94%€voting€power,Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€failed€to€rebut€the€presumption€ofÐ ,"|& Ðindependence.€€òòId.óó€at€1051.€€The€Court€made€clear€that€an€inference€of€a€conflict€that€excusesÐ Æ#( Ða€demand€must€be€such€that€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôthe€non„interested€director€would€be€more€willing€to€risk€hisÐ J%š * Ðor€her€reputation€than€risk€the€relationship€with€the€interested€director.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòId.óó€at€1052.€€Ð ä&4", ÐòòòòPlaintiffsóóÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôòò€Allegations€of€Alleged€ConflictóóóóÐ ~(Î#. Ðà  àPlaintiffs€allege€that€four€of€the€seven€Independent€Directors€had€specific€conflicts€andÐ ° Ðthat€all€seven€were€conflicted€because€they€had€a€history€of€approving€financial€deals€andÐ 4„ Ðpayments€to€the€Rechlers€that€favored€the€Rechlers€and€harmed€Reckson€Associates.€Ð ¸ Ðà  àòòòòMenakeróóóóÐ < Œ Ðà  àPlaintiffs€allege€that€Menaker€worked€for€JP€Morgan€&€Co.€Inc.€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔJP€MorganÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô)€fromÐ À  Ð1966„99€holding€various€positions,€including€president,€and€that€when€he€retired€in€1999€heÐ Z ª  Ðwas€managing€director€and€head€of€Corporate€Services€of€JP€Morgan€&€Co.€Inc.€of€NewÐ Þ .  ÐYork.€J.P.€Morgan€is€the€administrative€agent€that€oversees€the€group€of€14€banks€thatÐ b²  Ðprovides€Reckson€Associates€a€$500€million€line€of€credit.€€A€portion€of€the€proceeds€of€theÐ æ6  Ðsale€of€the€industrial€properties€was€earmarked€by€Reckson€Associates€to€pay€down€a€portionÐ jº  Ðof€that€outstanding€credit€facility.€€Assuming€that€J.P.€Morgan€benefitted€from€theÐ î> ÐTransaction€because€of€a€pay€down€of€the€credit€facility,€these€facts€do€not€show€thatÐ r ÐMenaker€had€a€conflict.Ð öF Ðà0  àòòòòQuickóóóóÐzÊ%#%# Ðà  àPlaintiffs€allege€that€Quick€worked€for€Quick€and€Reilly,€Inc.€from€1982€to€2000,€andÐ þN Ðthat€Quick€and€Reilly€is€now€an€affiliate€of€Fleet€Boston€Financial€which€does€mortgage€andÐ ‚Ò Ðfinancial€business€with€Reckson€Associates.€€This€past€and€indirect€business€relationship€failsÐ V  Ðto€establish€a€conflict.€Ð ŠÚ" Ðà0  àòòòòRanierióóóóÐ ^$%#%# ÐÒ«°Òà  à€€€€€Plaintiffs€allege€that€Ranieri€was€a€former€vice€president€of€Salomon€Brothers,€Inc.,Ð ’!â& Ðwhich€was€one€of€the€underwriters€of€Reckson€AssociatesÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€1996€public€offering,€and€thatÐ #f( ÐSalomon€Smith€Barney€(Salomon€BrothersÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€successor),€later€€merged€into€Citgroup,€whichÐ °$ * Ðparticipated€in€the€valuation€of€the€industrial€properties.€€Plaintiffs€also€allege€that€a€companyÐ J&š!, Ðrelated€to€Ranieri€is€a€tenant€in€one€of€Reckson€AssociatesÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôòò€óó178€properties.€€There€are€noÐ Î'#. Ðallegations€that€the€terms€of€the€lease€were€unfair€or€not€at€armÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€length.òò€€óóPlaintiffs€alsoÐ h)¸$0 Ðallege€that€Ranieri€was€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôhand„pickedÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€by€the€Rechlers.€€None€of€these€allegations€provideÐ ° Ða€factual€basis€of€a€conflict€that€would€excuse€a€demand.òòóóÐ Jš Ðà  à€€€€€òòòòKleinóóóóÐ Î Ðà  à€€€€€Plaintiffs€allege€that€Klein€assisted€the€late€William€Rechler€and€Defendant€GrossÐ R ¢ Ðin€developing€the€first€industrial€park€on€Long€Island€when€Klein€was€SmithtownÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2ÔsÐ Ö & ÐSupervisor€in€the€1960s,€and€that€from€1988€Klein€served€as€counsel€to€the€Association€forÐ p À  Ða€Better€Long€Island€(the€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔAssociationÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô),€an€organization€founded€by€Donald€Rechler,€ofÐ ô D  Ðwhich€he€was€a€former€president€and€chairman€of€the€board.€€The€fact€that€40€years€ago,€Mr.Ð ŽÞ  ÐKlein,€in€his€capacity€as€a€town€administrator,€may€have€helped€another€Rechler€familyÐ b  ÐmemberÔ€Šš2ˆˆŠ/ÔBÔ€Š/ˆˆŠš2Ô€who€is€now€deceased€Ô€Šš2ˆˆŠ/ÔBÔ€Š/ˆˆŠš2Ô€and€defendant€GrossÔ€Šš2ˆˆŠ/ÔBÔ€Š/ˆˆŠš2Ô€in€their€pursuit€of€a€successfulÐ –æ  Ðbusiness€venture€is€not€evidence€of€a€conflict.€€Nor€does€the€fact€that€he€is€or€was€counsel€toÐ 0€ Ðan€organization€foundedÐ ´ Ѐby€Donald€Rechler.Ý‚ÿÿÿÝÔ  ÔÔ  ÔÝ  Ý׃×Ý ƒÿÿÝòòÚ  Ú4Ú  ÚóóÝ  Ý×  ×Ð 8ˆ Ðà0  àòòòòGrossóóóó€Ð¼ %#%# Ðà  àAs€discussed€in€the€proceeding€paragraph,€Plaintiffs€allege€that€in€1961,€GrossÐ @ Ðtogether€with€the€late€William€Rechler,€and€Defendant€Klein,€conceived€and€developedÐ Ä ÐVanderbilt€Industrial€Park€on€Long€Island.€€This€allegation€is€not€sufficient€to€show€a€conflictÐ H˜  ÐÓfæÌÌÓà8  àòòòòHand„picked€by€the€Rechlers€and€History€of€Approving€FinancialÐ Ì" ÐTransactionsóóóóÐŽÞ#Í Í  ÐÌÓÌÌfæÓà  àPlaintiffs€allege€Gross,€Klein,€Kevenides,€Stephenson€and€Ranieri€were€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôhand„Ð !b% ÐpickedÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€by€the€Rechlers.€€For€the€reasons€discussed€above,€that€allegation€does€not€show€thatÐ ¬"ü' Ðthere€was€a€conflict.€€Plaintiffs€also€allege€that€Gross,€Kevenides,€Stephenson€and€Ranieri€hadÐ F$–) Ða€history€of€consistently€approving€financial€deals,€and€the€payment€of€millions€of€dollars€inÐ Ê%!+ Ðemployment€benefits€to€the€Rechlers,€which€served€no€legitimate€business€and€hurt€theÐ ° Ðcompany.€€These€allegations€do€not€show€a€conflict€under€the€cases€discussed€above€and€areÐ 4„ Ðsimply€an€indirect€way€to€attack€the€business€judgment€of€these€Directors,€whichò ò€ó óis€notÐ ¸ Ðproperly€considered€in€determining€demand€futility.€€òòSee€óódiscussion€below€at€ò òpage€14ó ó.Ð @  Ðà0  àòòòòNo€Allegations€of€a€Conflictóóóó€€ÐÈ %#%# Ðà  à€In€sum,€Plaintiffs€have€failed€to€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôclearly€demonstrate,€in€a€very€particular€mannerÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2ÔÐ L œ  Ðthat€the€Directors€were€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôso€personally€and€directly€conflictedÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€that€they€could€not€have€beenÐ æ 6  Ðreasonably€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôexpected€to€respond€to€a€demand€in€good€faith.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€òòWerbowskyóó,€362€Md.€at€620.€Ð €Ð  ÐÐ  j  ÐÝ‚ÿÿÿÝÓ  ÓÔ  ÔÔ  ÔÝ  ÝÓÌÌÓÓ  Óà0  àà « àò òòò3.à  àPlaintiffsó óóóÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôò òòò€Allegations€Fail€to€Clearly€Demonstrate€That€a€MajorityÐ ° Ðof€the€Directors€Were€So€Committed€to€the€Decision€That€They€CouldÐ –æ ÐNot€Have€Reasonably€Been€Expected€to€Respond€to€a€Demand€in€GoodÐ n¾ ÐFaith€and€Within€the€Ambit€of€the€Business€Judgment€Ruleó ó.ÐF–%#%# ÐÝ‚ÿÿÿä¢icerÝÔ  ÔÔ  ÔÓ  ÓÝ  ÝóóÌÓÌÌÓà  àPlaintiffs€argue€that€the€Directors€were€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôso€...€committed€to€the€decision...that€theyÐ øH Ðcould€not€have€reasonably€been€expected€to€respond€to€a€demand€in€good€faith€and€within€theÐ ’ â Ðambit€of€the€business€judgment€rule.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòWerbowskyóó,€362€Md.€at€620.€€In€support€of€theirÐ  f  Ðarguments,€Plaintiffs€allege€that€the€Defendants€acted€in€bad€faith€and€outside€the€ambit€ofÐ °  Ðthe€business€judgment€rule;€that€they€had€already€committed€the€proceeds€of€the€Transaction;Ð 4„  Ðand€that€the€Directors€would€have€been€subject€to€personal€liability€if€they€did€not€go€forwardÐ ¸  Ðon€the€Transaction.€€Ð <Œ  Ðà0  àòòòòBad€faith€and€Outside€Business€Judgment€ruleóóóóÐÀ%#%# Ðà  àThe€òòWerbowskyóó€Court€held€that€in€determining€if€a€demand€was€futile,€a€court€shouldÐ D” Ðnot€address€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôissues€that€go€to€the€merits€of€the€complaint€Ô€Šš2ˆˆŠ/ÔBÔ€Š/ˆˆŠš2Ô€whether€there€was,€in€fact,€selfÐ È Ðdealing,€corporate€waste,€or€a€lack€of€business€judgment€with€respect€to€the€decision€orÐ b² Ðtransaction€under€attack.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€362€Md.€at€620.€€Thus€a€demand€is€not€excused€by€allegations€thatÐ æ6 Ðthe€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ô[d]efendantsÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€approval€of€the€[t]ransaction€constitutes€a€breach€of€both€their€commonÐ €Ð Ðlaw€and€statutory€duties.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€Therefore,€PlaintiffsÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€allegations€that€the€Transaction€wasÐ j ÐÔ€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôfacially€inadequate,€and€unfair€to€RecksonÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€is€not€properly€considered€in€determining€theÐ ´! Ðnarrow€issue€of€demand€futility.òòòòÐ N ž# Ðà0  àThe€Proceeds€Were€Already€CommittedóóóóÐÒ!"%%#%# ÐÑ€Ñà  àPlaintiffs€argue€that€a€demand€was€too€late€once€the€decision€was€announced€becauseÐ V#¦' ÐRcskson€Associates€was€committed€at€the€time€of€the€September€10òòthóó€announcement€to€useÐ Ú$* ) Ðthe€funds€received€to€purchase€1185.€€According€to€Plaintiffs,€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔDefendants€are€asking€theÐ ^&®!+ ÐCourt€to€find€that€the€decision€and€subsequent€negotiations€to€purchase€1185€occurred€onlyÐ ø'H#- Ðafter€the€September€10òòthóó€announcement€of€the€Transaction,€and€therefore,€reflected€aÐ |)Ì$/ ÐÑÑâ âѰ°ÑѰÑâ âÑ  Ñwholesale€change€in€RecksonÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€business€strategy€concerning€use€of€the€TransactionÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2ÔsÐ ° Ðproceeds.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€To€the€contrary,€Plaintiffs€argue€that€the€decision€to€buy€1185€wasÐ Jš ÐÔ€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔirretrievablyÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€made€before€the€proposed€Transaction.€€Ð ä4 Ðà  àBecause€this€is€a€Motion€to€Dismiss,€the€Court€is€not€basing€its€decision€upon€eitherÐ ~ Î Ðof€those€suppositions€but€only€on€the€allegations€in€the€Complaint.€€In€Paragraph€15,Ð  R ÐPlaintiffs€allege€that€an€agreement€to€purchase€1185€was€made€on€November€10òòthóó€:Ð † Ö  ÐÓfæÌÌÓà8  àà8[ Í Í àOn€November€10,€2003,€Defendants€entered€into€an€agreementÐ  Z  Ðto€purchase€the€office€building€at€1185€Avenue€of€the€AmericasÐ Ì  Ðin€New€York€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ô1185"),€which€it€could€not€otherwise€close€uponÐ ŽÞ  Ðwithout€the€proceeds€from€the€sale€of€the€Industrial€Portfolio,Ð [«  Ðwhich€were€used€as€a€contract€deposit€for€the€purchase€of€thatÐ m  Ðproperty.Ðß/ [ u[ u ÐÌÓÌÌfæÓArguing€that€in€order€to€sign€a€contract€on€November€10òòthóó€for€property€in€Manhattan,€the€dealÐ c³ Ðhad€to€have€been€negotiated€long€before€then,€Plaintiffs€ask€this€Court€to€ignore€the€allegationÐ ç7 Ðin€Paragraph€15€of€the€Complaint.€€As€further€evidence€that€the€deal€was€complete€at€the€timeÐ k» Ðof€the€September€10òòthóó€announcement,€Plaintiffs€point€to€an€alleged€representation€made€onÐ ï? ÐNovember€4,€2003€by€one€of€DefendantsÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€attorneys€at€a€scheduling€conference.Ý‚ÿÿÿÝÔ  ÔÔ  ÔÝ  Ý׃×Ý ƒÿÿÝòòÚ  Ú5Ú  ÚóóÝ  Ý×  ׀Рsà Ðà  àHowever,€neither€the€facts€alleged€in€the€Complaint€nor€the€facts€that€Plaintiffs€askÐ  ] Ðthe€Court€to€assume€show€that€Defendants€were€so€committed€to€the€decision€that€they€couldÐ ‘á Ðnot€respond€to€a€demand€in€good€faith€and€within€the€ambit€of€the€business€judgment€rule.€Ð e! ÐUnder€the€facts€alleged€in€the€Complaint,€which€the€Court€must€accept€as€true€for€purposesÐ ™é# Ðof€ruling€on€a€motion€to€dismiss,€the€contract€to€purchase€1185€was€entered€into€onÐ !m% ÐNovember€10òòthóó,€which€was€òòafteróó€the€suit€was€filed€and€2€months€after€the€announcement€ofÐ ¡"ñ' Ðthe€Transaction.€€Under€the€facts€Plaintiffs€ask€the€Court€to€assume€that€negotiations€toÐ %$u) Ðpurchase€property€is€not€an€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôirretrievable€commitment.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€Defendants€may€well€have€decidedÐ ° Ðto€purchase€1185€with€the€proceeds€of€the€Transaction€but€that€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔdecisionÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€would€not€have€Ð Jš Ðprevented€the€Board€from€responding€to€a€demand€in€good€faith€and€within€the€ambit€of€theÐ ä4 Ðbusiness€judgment€rule.Ý‚ÿÿÿÝÔ  ÔÔ  ÔÝ  Ý׃×Ý ƒÿÿÝòòÚ  Ú6Ú  ÚóóÝ  Ý×  ×€€€Finally,€Plaintiffs€fail€to€explain€how€they€were€excused€fromÐ h ¸ Ðmaking€a€demand€on€September€11òòthóó€based€on€facts€they€learned€on€November€4òòthóó€.Ð ì < Ðà  àThe€òòWerbowskyóó€Court€noted€that€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôa€pre„suit€demand€on€the€directors€is€not€an€onerousÐ p À  Ðrequirement.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€362€Md.€at€619.€€In€fact,€the€making€of€such€a€demand€is€far€less€onerous€thanÐ  Z  Ðthe€preparation€and€filing€of€a€shareholder€derivative€complaint€Ô€Šš2ˆˆŠ/ÔBÔ€Š/ˆˆŠš2Ô€a€task€that€lawyers€for€nineÐ ¤ô  Ðdifferent€plaintiffs,€including€the€three€Plaintiffs€before€this€Court,€managed€to€accomplishÐ >Ž  Ðin€far€less€than€two€months.Ð Â Ðà8  àòòòòLack€of€Fiduciary€out€ClauseóóóóÐF–Í Í  Ðà  àPlaintiffs€point€out€that€the€Transaction€with€the€Rechlors€had€no€fiduciary€out€clauseÐ Ê Ðthat€would€allow€the€Directors€to€exit€the€contract€if€faced€with€a€challenge€to€the€DirectorÐ Nž ÐDefendantsÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€decision€to€approve€the€sale.€€If€the€Directors€subsequently€terminated€theÐ Ò" Ðcontract,€the€beneficiaries€of€the€contract,€in€particular€the€Rechler€family€members€who€wereÐ l¼ Ðnot€directors€of€Reckson€Associates,€could€have€brought€suit€against€Reckson€Associates€forÐ ð@ Ðbreach€of€contract.€€And€if€such€a€suit€was€filed€and€won,€Plaintiffs€contend€that€RecksonÐ tÄ  ÐAssociates€would€in€turn€sue€the€Independent€Directors€for€contribution€and€the€DirectorsÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2ÔÐ øH" Ðand€OfficersÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔD€&€OÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô)€insurance€coverage€would€probably€not€cover€any€judgementÐ ’ â$ Ðagainst€the€€directors€and€officers€because€D€&€O€policies€commonly€contain€an€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔinsuredÐ ,"|& Ðversus€insuredÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€exclusion.€€That€exclusion€would€preclude€the€insurance€carrier€from€payingÐ Æ#( Ðfor€any€breach€of€contract€claim€by€Reckson€Associates€against€its€own€directors.€€Thus,€suchÐ `%° * Ða€suit€would€expose€the€Independent€Directors€to€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôruinous€personal€liability,Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€and€thus€theyÐ ° Ðwould€not€respond€to€any€demand€in€good€faith€and€within€the€ambit€of€the€businessÐ Jš Ðjudgment€rule.Ð Î Ðà  àIn€òòWerbowkyóó€one€of€the€allegations€was€that€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ô€it€was€likely€that,€by€reason€of€languageÐ R ¢ Ðin€the€corporation's€directors'€and€officers'€liability€insurance€policies,€the€corporation€wouldÐ ì < Ðbe€precluded€from€bringing€an€action€against€the€directors.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€362€Md.€at€€590.€€òòSee€also€id.Ð p À  Ðóóat€592.€€Although€the€issue€was€not€directly€addressed€by€the€appellate€court,€that€Court€notedÐ  Z  Ðthat€the€trial€court€had€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôrejected€the€notion,€drawn€from€òòEdge€Partners,€L.P.€v.€Dockser,óó€944Ð ŽÞ  ÐF.Supp.€438€(D.Md.1996),€that€a€lack€of€insurance€coverage€for€named€directors€can€excuseÐ (x  Ða€Ô € Ôdemand.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€362€Md.€at€594.€€Based€on€the€rationale€of€òòWerbowskyóó,€this€Court€concludes€thatÐ ¬ü  Ðòò€óóthat€when€it€does€directly€address€the€issue,€the€Court€of€Appeals€will€most€likely€follow€theÐ F– Ðlead€of€other€courts€which€have€held€that€an€insured„versus„insured€provision€does€not€excuseÐ Ê Ða€pre„suit€demand.òò€€See,€e.g.,€In€re€Prudential€Ins.Co.€Derivative€Litig.óó,€659€A.2d€961,€973Ð Nž Ð(N.J.€Ch.€Ct.€1995)€(Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôroutine€excuse€of€demand€based€on€the€existence€of€such€standardÐ Ò" Ðexclusions€would€eviscerate€the€demand€requirementÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô);€òòStoner€v.€Walshóó,€772€F.€Supp.€790,Ð l¼ ÐÐ  V Ѐ805€(S.D.N.Y.€1991)€(rejecting€argument€that€liability€insurance€policy€exclusion€renderedÐ ° Ðboard€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2ÔinterestedÔ€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô).Ð 4„ Ðà  àPlaintiffsÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€reliance€on€€òòRales€v.€Blasbandóó,€634€A.2d€927,€936€(Del.€1993)€does€notÐ Î Ðsuggest€a€different€result.€€First,€as€discussed€previously€Delaware€excuses€a€demand€whereÐ h ¸ Ðone€would€be€required€by€Maryland.€€òòSee€óónote€3.€€€Second,€even€the€òòRales€óóCourt€recognizedÐ ì < Ðthat€the€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ômere€threat€of€personal€liability€for€approving€a€questioned€transaction,€standingÐ p À  Ðalone,€is€insufficient€to€challenge€either€the€independence€or€disinterestedness€of€directorsÐ  Z  Ð....Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€òòId.óó€at€936€(citing€òòAronson€v.€Lewisóó,€473€A.2d€805,€815€(1984).€€Third,€the€Plaintiffs€do€Ð ŽÞ  Ðnot€include€allegations€concerning€the€lack€of€a€fiduciary€out€clause€and€the€inclusion€of€anÐ (x  Ðinsured„versus„insured€provision.Ð ¬ü  Ðà  àFinally€this€argument€is€based€on€a€lot€of€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôifs,Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôands,Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€and€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôbuts.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2Ô€€It€assumes€thatÐ 0€ Ðòòif€óóa€demand€had€been€made,€the€Outside€Directors€would€have€decided€to€delay€or€terminateÐ Ê Ðthe€contract€with€the€Family€Group€Ý‚ÿÿÿÝÔ  ÔÔ  ÔÝ  Ý׃ ×Ý ƒÿÿÝòòÚ  Ú7Ú  ÚóóÝ  Ý×  ×;€if€the€contract€with€the€Family€Group€was€delayed€orÐ Nž Ðterminated,€€the€Family€Group€would€not€renegotiate€the€contract,€but€file€suit€to€enforce€theÐ Ò" Ðcontract;€òòifóó€suit€were€filed,€Reckson€Associates€would€be€found€liable€for€the€contractÐ V¦ Ðdamages;€òòif€óóReckson€Associates€were€found€liable,€it€would€sue€the€directors€for€contribution;Ð Ú* Ðòòifóó€Recskon€Associates€sued€the€Directors€for€contribution,€the€suit€would€be€successful;€andÐ ^®  Ðòòifóó€it€is€successful€the€Directors€would€not€be€covered€by€insurance.€€And€finally€and€mostÐ â2" Ðimportantly€based€on€that€potential€liability,€the€Directors€would€not€have€considered€aÐ f ¶$ Ðdemand€in€good€faith€and€within€the€ambit€of€the€business€judgment€rule.€€Well€as€my€motherÐ ê!:& Ðoften€said,€Ô€Šš2ˆˆŠ/ÔAÔ€Š/ˆˆŠš2Ôif€Ô€Šš2ˆˆŠ/Ô>Ô€Š/ˆˆŠš2ÔifÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€were€a€skiff,€weÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôd€all€drown.Ô€Šš2ˆˆŠ/Ô@Ô€Š/ˆˆŠš2ԀРn#¾( ÐÐ  %X * ÐÓ  Óò òCONCLUSIONó óÐ ° ÐÓ  Óà  àFor€all€the€reasons€stated€above,€the€Court€will€enter€an€order€granting€the€IndependentÐ 4„ ÐDirector€DefendantsÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ô€and€Walter€GrossÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€Motion€to€Dismiss€and€Reckson€Associates€RealtyÐ ¸ ÐCorporationÔ€Šš2ˆˆŠ/Ô=Ô€Š/ˆˆŠš2Ôs€Motion€to€Dismiss.Ð R ¢ ÐÓfæÌÌÓÓ ««##°œXÓDated:€May€25,€2004à€¥¥*%#à________________________________ˆÐ ì < Ðà€++#%#àJudge€Evelyn€Omega€Cannon€€€€€€€€€€€€€€ˆÐ ® þ  ÐÓB.««[ ³ c»kÃsË ##««##BÓÌÔ€Â[jˆŠ/ÔMotion.to.Dismiss.opinion.final.wpdÔ€Š/ˆÂÂ[jÔ