Gollust v. Mendell

Mendell (plaintiff), a Viacom International shareholder, brought a derivative suit alleging Gollust and related entities (defendants) engaged in short-swing trading violating Section 16(b), realizing $11 million in profits; International's board refused to sue, so Mendell filed derivatively. While the suit was pending, a merger converted Mendell's International shares into cash and stock in a new corporate parent (renamed Viacom, Inc.); the defendants moved for summary judgment, arguing Mendell no longer owned stock of the original "issuer" and had lost standing. The district court granted summary judgment for the defendants, and the Second Circuit reversed.