The New York State Supreme Court Appellate Division, Second Department, issued a decision affirming the dismissal with prejudice of a shareholder derivative complaint brought against Paul, Weiss client FalconStor Software, Inc. Plaintiffs alleged that a bribery scheme took place under the direction and watch of FalconStor's board of directors, and that the directors breached their fiduciary duties by approving certain stock option grants that were used in the scheme. On March 5, 2013, New York State Supreme Court Justice Emily Pines accepted the defendants' argument that demand on FalconStor's board before filing the action was not excused and dismissed the plaintiffs' complaint with prejudice. On March 17, 2015, a panel of the New York Appellate Division, Second Department unanimously affirmed Justice Pines's decision, finding that the plaintiffs' allegations were insufficient to create a reasonable doubt that FalconStor's board was properly able to consider a demand.

The Paul, Weiss team included litigation partners Daniel Kramer and James Brochin (who argued the appeal).