Mozilo

MEMORANDUM **

In this shareholder derivative action, five institutional investors have sued on behalf of the former Countrywide Financial Corporation (“Countrywide”), asserting state and federal derivative claims for breach of fiduciary duty and securities law violations against former Countrywide officers and directors. While the suit was pending in the district court, Countrywide *329 merged into a wholly-owned subsidiary of Bank of America Corporation in a stoek-for-stock transaction that divested the plaintiffs of their Countrywide shares. Nominal defendant Countrywide then moved for judgment on the pleadings, arguing that the merger destroyed the plaintiffs’ standing to pursue derivative claims on Countrywide’s behalf. The district court granted the defendant’s motion, finding that the plaintiffs cannot satisfy the “continuous ownership” requirement for shareholder derivative standing under Fed.R.Civ.P. 23.1 and Delaware law.

On appeal, the parties agree that Delaware law governs the plaintiffs’ derivative standing, with both parties relying on Ark. Teacher Ret. Sys. v. Caiafa, 996 A.2d 321 (Del.2010).

We certified the question of post-merger derivative standing to the…