Superior Court - CHARLES LEMENESTREL, GENEVIEVE LEMENESTREL-MANAS AND SUPERIOR GROUP, INC. v. WILLIAM G. WARDEN, III WILLIAM G. WARDEN, IV, WALTER E.

CHARLES LEMENESTREL, GENEVIEVE LEMENESTREL-MANAS AND SUPERIOR GROUP, INC. v. WILLIAM G. WARDEN, III WILLIAM G. WARDEN, IV, WALTER E. BACHMAN, III, LOUIS T. CULLEN, RAYMOND B. LANGTON AND SUPERIOR GROUP, INC. APPEAL OF: CHARLES LEMENESTRELAND GENEVIEVE LEMENESTREL-MANAS No. 3411 EDA 2007 2008 PA Super 295 Atlantic: 964 A.2d 902 Petition for Reargument Denied 3/2/2009 Filed: 12/31/2008
	Appeal from the Order Entered November 9, 2007 In the Court of Common Pleas of Delaware County Civil Division at No. 05-5148
Before: BENDER, DONOHUE and FREEDBERG, JJ.
Opinion by: BENDER, J.
Charles LeMenestrel and Genevieve Lemenestrel-Manas (collectively, the “LeMenestrels”), minority shareholders and siblings, and Superior Group, Inc. (the “Company”), who are the plaintiffs in this case, appeal from the November 9, 2007 order that sustained the preliminary objections of the defendant directors, William G. Warden, III (“Warden III”), William G. Warden, IV (“Warden IV”), Walter E. Bachman, III (“Bachman” or “Bachman III”), Louis T. Cullen (“Cullen”), Raymond B. Langton (“Langton”), and the Company, and dismissed with prejudice the shareholders’ derivative suit filed by the plaintiffs. The Honorable Charles B. Burr, II, who presided over this case, determined that the special litigation committee (the “Committee”) formed by the Company’s board of directors in response to a demand letter from the LeMenestrels (the “Demand Letter”) was disinterested, independent, impartial and adequately informed in reaching its good faith conclusion that it was not in the best interests of the Company to proceed with the LeMenestrels’ shareholders’ derivative suit. In reaching his decision, Judge Burr made extensive findings of fact and relied largely on guidelines for judicial review of the right of a corporation to terminate shareholder derivative litigation as set forth in The American Law Institute’s Principles of Corporate Governance: Analysis and Recommendations (“ALI Principles”), particularly sections 7.07-7.10 and 7.13, as adopted by our Supreme Court in Cuker v. Mikalauskas, 692 A.2d 1042 (Pa. 1997). Essentially, in accordance with our standard of review, we conclude that Judge Burr thoroughly examined the circumstances of this case, his extensive findings of fact are supported by the record, and he did not err or abuse his discretion in determining that the Committee’s decision to seek dismissal of the derivative suit was entitled to protection under the business judgment rule. Accordingly, we affirm.

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