Facts

Christopher White filed a complaint against Richard Demaray and Demaray LLC. The complaint included both individual claims and shareholder derivative claims.

PLAINTIFF'S CONTENTIONS:
In 2003, Demaray was the president of Symmorphix Inc., a nanotechnology company that owned a larger number of patents. At the time, Robert White, Christopher's father, worked for Petters Group Worldwide. Petters Group purchased Symmorphix and obtained its patents.

Later, in 2008, after leaving Symmorphix, Demaray decided to obtain a license to Symmorphix's patents, which he hoped to use for a new company he had founded, Antropy. Antropy itself obtained from Demaray an exclusive license to any and all of Demaray's patents that pertain to solar energy that were at any stage of development related to solar energy, and Christopher began working with Demaray to raise capital and monetize the patents. However, shortly thereafter, Petters Group was investigated for investment fraud, and a court-appointed receiver placed the Symmorphix patents on hold.

Christopher and Demaray attempted to obtain capital so they could obtain the patents from the receiver and monetize Antropy's intellectual property. Christopher was made a director and officer of Antropy, and was offered the chance to purchase 48 percent of shares in the corporation; Demaray was to retain 52 percent ownership of Antropy. From 2009 to 2011, Christopher worked for Antropy to secure necessary financing. However, in 2011, when it came time to purchase the Symmorphix patents, Demaray purchased them for himself, rather than for Antropy. Demaray intended to take the patents, abandon Antropy, and found a new company. When Christopher learned of this, he filed suit.

DEFENDANT'S CONTENTIONS:
Demaray moved to dismiss the derivative claims of the complaint, arguing that Demaray had never filed Antropy's Amended Articles of Incorporation with the Delaware Secretary of State, so that Antropy was unable to issue the shares Christopher thought he had purchased. Demaray argued that Christopher lacked standing to assert the derivative claims because he was never a shareholder.

Result

The court agreed that Christopher lacked standing to bring shareholder derivative claims, and dismissed the shareholder derivative causes of action of the complaint. The individual claims remain.