Question

Pfizer Inc.

Please read the following case and answer the questions:

Pfizer Inc. paid $2.3 billion to settle civil and criminal charges alleging that it had illegally marketed 13 of its most important drugs. This settlement made history, but not in a good way. It was both the largest criminal fine and the largest settlement of civil health care fraud charges ever paid. Shareholders filed a derivative suit against the Pfizer board and top executives. Defendants responded with a motion to dismiss on the grounds that shareholders had not made demand on the board.

Explain what is meant by making demand.

What choices does a board normally have when demand has been made?

Was demand necessary in this case? Please explain your answer.

Answer 1

Pfizer Inc has paid $ 2.3 billon to settle civil and crimanal charges which is largest settlement ever paid.The court excused demand because the Complaint alleged" Misconduct of suchpurvasiveness and magnitude, undertaken in the face of the Board own express formal undertakings to directly moniter and prevent such misconduct, that the interface of deliberate disregards by each and every member of board entirely reasonable"

The board was so careless in exercising its responsibilities that demand would be reasonable correct.