Fox v. Reich & Tang, Inc.

The court held that a Rule 23.1 demand is not required in a shareholder suit brought pursuant to Section 36(b) of the Investment Company Act. In so holding, the court explained: “Since directors cannot cut off a suit and § 36(b) does not authorize them to institute one, and because shareholder plaintiffs are necessarily challenging fees the directors evaluated and approved, the traditional reason for the demand requirement simply does not apply.”