Boland v. Boland, 31 A.3d 529

A family-owned business (Boland Trane) was owned by eight siblings; three served as directors/officers, five were non-active in management.
After Boland Sr.’s death, the corporations sought to repurchase Colleen Boland’s stock under a Stock Purchase Agreement (SPA) valuing her shares at book value + 25%.
Colleen’s estate refused the buyback as undervalued; the corporations filed a declaratory judgment action to enforce the SPA, naming all siblings as defendants/interested parties.
Two non-director siblings, John and Kevin, filed a derivative action (self-dealing, breach of fiduciary duty) and direct cross-claims alleging oppression, in the circuit court.
The corporations appointed a Special Litigation Committee (SLC) of independent directors to investigate; the SLC concluded the stock transactions were legitimate and the SPA enforceable.
Circuit Court granted summary judgment to corporations in the derivative action under the BJR and dismissed cross-claims in the declaratory action, relying on the SLC report and res judicata.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standard of review for SLC under business judgment rule	Deriv. plaintiffs urged independent Zapata review instead of Auerbach-style review.	SLC findings should be reviewed under enhanced Auerbach framework with deference to SLC’s conclusions.	Court adopts enhanced Auerbach: SLC independence and procedures must be shown; SLC merits reviewed, not de novo merits.
Whether direct oppression claims are precluded by res judicata	Direct oppression claims are distinct from derivative claims and not barred by prior derivative disposition.	Derivative resolution precludes the direct oppression cross-claims under res judicata.	Res judicata does not bar the direct oppression claims; subsequent merits must be determined separately.
Enforceability of the Stock Purchase Agreements	SPAs were unenforceable due to oppression and improper acts by majority; no valid consideration.	SPAs were supported by valid consideration and enforceable; oppression issues belong in separate relief avenues.	SPAs are enforceable against Colleen’s estate; oppression claims may be pursued in dissolution/other equitable relief.

Werbowsky v. Collomb, 362 Md. 581 (Md. 2001) (standard to balance derivative action review; demand and SLC context)
Shenker v. Laureate Educ., Inc., 411 Md. 317 (Md. 2009) (distinguishes direct vs derivative claims; fiduciary duties to shareholders)
Auerbach v. Bennett, 47 N.Y.2d 619 (N.Y. 1979) (limited procedural review of SLC; independence/good faith matter)
Zapata Corp. v. Maldonado, 430 A.2d 779 (Del. 1981) (independent business judgment standard for SLC reviews)
In re Oracle Corp. Derivative Litig., 824 A.2d 917 (Del. Ch. 2003) (rigorous independence/procedural scrutiny of SLC; contextual independence test)
Shenker v. Laureate Educ., Inc. (for MD context), 411 Md. 317 (Md. 2009) (distinguishes direct vs derivative; fiduciary duties to shareholders)