## Facts

- Stockholders filed consolidated derivative and class litigation against Fuqua Industries, Inc., its directors, and its principal shareholder, Triton Group, Inc.
- After extensive proceedings, all class claims and all but one derivative claim were dismissed; the remaining derivative claim challenged board actions exempting Triton from 8 Del. C. § 203 and approving a 4.9 million share repurchase, allegedly to increase Triton’s control and entrench the board.
- Years into the case, defendants deposed derivative plaintiffs Virginia Abrams (a long-term, substantial stockholder) and Alan Freberg (a small stockholder) and asserted both were unfamiliar with core allegations and exercised little control over the litigation.
- Defendants moved to disqualify Abrams and Freberg as derivative representatives under Court of Chancery Rules 23 and 23.1 for inadequate representation.
- Abrams had significant health and memory issues by deposition and struggled to recall details; Freberg owned a small stake and had served as a named plaintiff in other derivative suits.

## Issues

1. Whether Abrams and Freberg should be disqualified under Rules 23 and 23.1 as inadequate derivative representatives because of limited knowledge of case details and limited personal control over counsel-driven litigation.
2. What minimum level of familiarity and involvement is required to satisfy adequacy of representation in a derivative action.
3. Whether health or memory problems, small share ownership, or participation in other derivative suits, without more, establishes inadequacy.

## Decision

- The Court of Chancery denied the motions to disqualify Abrams and Freberg.
- The court held that adequacy under Rules 23 and 23.1 was satisfied because neither plaintiff had interests antagonistic to the corporation or stockholders, both were represented by competent and experienced counsel, and each had at least basic familiarity with the lawsuit’s core claims.
- The court declined to impose a requirement that representative plaintiffs command detailed knowledge of an aged, complex record or personally direct day-to-day litigation strategy.

## Legal Principles

- Adequacy under Rules 23 and 23.1 requires: (1) no antagonistic interests, (2) competent and experienced counsel, and (3) basic familiarity with the facts and issues of the case.
- A derivative representative need not master the full factual record or recall minutiae; reliance on qualified counsel is consistent with derivative litigation practice.
- Poor deposition performance or limited recollection, including from illness, does not mandate disqualification if the plaintiff understands the nature of the alleged wrongdoing at a basic level and lacks disabling conflicts.
- Small stock ownership or service as a plaintiff in other derivative matters is not, standing alone, proof of “puppet” status or inadequate representation.

## Conclusion

The court allowed the derivative action to proceed with Abrams and Freberg as representatives, holding that Rule 23.1 focuses on conflicts, counsel competence, and baseline understanding of the claims, not on demanding detailed factual mastery or extensive personal control over counsel-managed litigation.


In re Fuqua Indus., Inc. S’holder Litig., 752 A.2d 126 (Del. Ch. 1999)