Court Dismisses Shareholder Derivative Suit Against Scottish Re Officers and Directors
A United States District Court, applying the law of the Cayman Islands, has dismissed a shareholder derivative action brought against certain of Scottish Re’s officers and directors, alleging misrepresentations as to the Company’s business and false financial reports in violation of United States securities laws. In accordance with Cayman law, due to the silence of Cayman law as to the relevant issues, the Court consulted English law. Under English law, derivative claims are owned and controlled by the company rather than by its shareholders, and shareholders generally lack standing to bring such claims. Failing to find any applicable exception to this general standing rule, the court dismissed the claims. Winn v. Schafer, Case No. 06-10170 (USDC S.D.N.Y. May 7, 2007).
