Court Grants Dismissal on Federal Derivative Lawsuit

The United States District Court for the Central District of
California dismissed without leave to amend the federal derivative lawsuit
against online jewelry retailer and its board members on Feb. 24.

The Court granted’s motion to dismiss the lawsuit for
the plaintiff’s failure to adequately allege that a pre-suit demand on the board of directors would have been futile.

The lawsuit alleged violations of law, including breaches of
fiduciary duties, shill bidding, waste of corporate assets, unjust enrichment,
and violations of California Corporations Code. Allegations relating to
the company’s co-op marketing contributions and minimum gross profit guarantees
were included on an amended complaint.

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