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P holds shares in D. D is engaged in the design, development, and manufacturing of networks used by cable operators to distribute video and other services to customers. In 1998, D began shipping newly developed digital set-tops that replaced analog set-tops and equipment previously sold by D. On April 19, 2001, D reported record financial results, but indicated it expected to sustain business performance at the present level rather than expand at growth rates previously achieved. During D's Fourth Quarter Fiscal Year 2001, certain officers and directors traded their stock in the company during D's open trading window. These sales were in line with their previous trading histories. Financial results for the Fourth Quarter were released showing a record year, but new orders and sales declined in the Fourth Quarter from the Third Quarter. D's stock price dropped. On December 10, 2001, D received a “derivative demand” letter from P claiming the stock price drop had been due to breaches of fiduciary duty by members of the Board of Directors. P demanded that D sue the defendants for unspecified damages. D requested additional information concerning the allegations. No response was received. On February 16, 2002, the Board of Directors held a special meeting and appointed three members of the Board who had not sold stock in the questioned transactions to serve as the Special [***3] Litigation Committee (SLC) provided for in OCGA § 14-2-744 (a). The SLC was given full power and authority to make final binding determinations on the Board's behalf regarding the derivative action. The SLC had full access to all personnel, advisors, and records, and D directed all officers and employees to cooperate with the SLC. The SLC retained independent legal counsel and a special accounting advisor. On November 14, 2003, P filed his complaint, naming all members of the Board of Directors and numerous senior corporate officers (Ds), claiming breaches of fiduciary duties by these individuals, including releasing inaccurate financial information and then engaging in stock sales based on alleged insider information. After interviewing numerous witnesses, reviewing voluminous documents, and consulting with independent legal counsel and financial advisors, the SLC determined that P's claims were without merit and contrary to the best interests of D and its shareholders. The Board of Directors adopted the recommendations and a motion to dismiss P's lawsuit was filed. No response was filed by P, and Ds moved for dismissal. P filed an emergency motion. At that hearing, P's counsel acknowledged that, as of that date, no requests for discovery had been filed by P. The court dismissed the suit, and P appealed.

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