Therefore, the court grants defendants' motion to dismiss for failure to make demand as to the land purchase and lease termination.
4. Scheme to Enrich O'Donnell
Plaintiffs allege that the above transactions, taken together, constitute a scheme -- "a continuous course of conduct and business to unlawfully and improperly enrich defendant O'Donnell and to circumvent the directives of the Casino Control Commission." Consolidated Complaint at para. 15. It is true that each of these transactions involve O'Donnell. However, plaintiffs fail to offer facts that the same directors approved the transactions, and even if they did, that the directors were not disinterested or independent.
Bally had a reasonable business purpose, as articulated by plaintiffs, in extinguishing its business connections with O'Donnell. Failure to eliminate its relationship with O'Donnell could have jeopardized its license to do business in Atlantic City. See, e.g., Consolidated Complaint at paras. 20, 23, 25, 26 and 34. The pleading demonstrates that Bally severed its ties to O'Donnell methodically, over a period of nearly five years, and kept its casino license as a consequence.
The court has thoroughly considered the plaintiffs' allegations as a group and finds that they do not create the reasonable doubt needed to excuse demand.
An appropriate order will be entered.
[EDITOR'S NOTE: The following court-provided text does not appear at this cite in 608 F. Supp.]
This matter having come before the court on the 16th day of November, 1984; and
The court having considered the submissions and arguments; and
For the reasons stated in the court's opinion filed this date,
It is on this 10th day of January, 1985, hereby ORDERED that:
1. Defendants' motion to stay this proceeding is DENIED;
2. Defendants' motion to dismiss plaintiffs' complaint for failure to make demand pursuant to Fed. R. Civ. P. 23.1 as to those allegations concerning the employment contract between Bally and O'Donnell and the termination thereof, and the land purchase and lease termination, is GRANTED; and
3. Defendants' motion to dismiss plaintiffs' complaint for failure to make demand pursuant to Fed. R. Civ. P. 23.1 as to those allegations concerning the stock purchases, is DENIED.
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