Moreover, it can hardly be argued that terminating a lawsuit is an area in which courts have no special aptitude... what we say here applies to cases involving allegations of direct economic injury to the corporation diminishing the value of the shareholders' investment as a consequence of fraud, mismanagement or self dealing.

Finally, the function of the court's review is to determine the balance of probabilities as to likely future benefit to the corporation, not to render a decision on the merits, fashion the appropriate legal principles or resolve issues of credibility.

Where the court determines that the likely recoverable damages discounted by the probability of a finding of liability are less than the costs to the corporation in continuing the action, it should dismiss the case.

The costs which may properly be taken into account are attorney's fees and other out-of-pocket expenses related to the litigation and time spent by corporate personnel preparing for and participating in the trial.

The court should also weigh indemnification which is mandatory under corporate by-laws, private contract or Connecticut law, discounted of course by the probability of liability for such sums.

Quite apart from the elusiveness of attempting to predict such effects, they are quite likely to be directly related to the degree of wrongdoing, a spectacular fraud being generally more newsworthy and damaging to morale than a mistake in judgment as to the strength of consumer demand.

First, where the likely net return is not substantial in relation to shareholder equity, the court can consider the degree to which key personnel may be distracted from corporate business by continuance of the litigation.

Moreover, when potential lost profits are taken into account, the basis for calculating them must be something more solid than the conclusory opinions of alleged experts, e.g., verifiable examples in similar firms.Judge Cardamone, dissenting, disapproved of the method.

[...] In a land weary of overregulation and the kind of judicial activism embodied in the second step of Maldonado, there may well be a strong inclination for business to incorporate in states more hospitable to them.