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Delaware Justices Uphold Ultragenyx Board Win Over Demand Letter

May 1, 2020, 1:16 PM

An Ultragenyx Pharmaceutical Inc. shareholder’s “harmless letter” telling the drug company’s board it was overpaying itself counts as a rejected demand for an internal investigation, which dooms his lawsuit, Delaware’s top court ruled.

The one-page ruling Thursday affirmed, and expressly adopted the reasoning of, the Chancery Court decision dismissing the case in October.

The derivative suit targeted Ultragenyx’s eight nonemployee directors. It challenged their $400,000 annual compensation, which allegedly far exceeds the median at comparable companies. By taking those excessive salaries, the board members were breaching their duty of loyalty to the company, the suit claimed.

The shareholder plaintiff ...