Plaintiffs, minority shareholders of Hoover Group, Inc. a Deleware corporation, commenced a derivative action on behalf of the corporation against its directors, alleging breach of fiduciary duty and corporate waste in connection with the corporation's sale of its 41% stock interest in JAC Products, Inc. for what is allegedto be grossly inadequate consideration. We agree with the motion court that pursuant to New York's borrowing statute, CPLR 202, the applicable Statute of Limitations is that of Georgia, since that is where Hoover had its principle office and where Hoover's alleged monetary damages would be felt (see, Knieriemen v. Bache Halsey Stuart Shields, 74 A.D.2d 290, 296, appeal dismissed 50 N.Y.2d 1021, 1059; Prefabco, Inc. v. Olin Corp., 71 A.D.2d 587; Federal Deposit Ins. Corp. v. Cohen, *9, 1996 WL 87248, 4 [SD NY, Feb. 29, 1996, Stanton, J.]). Under the applicable Georgia limitations period, plaintiffs' action was timely commenced.
Hoover's board of directors appointed a special committee to investigate adn report on the challenged transaction. The motion court correctly found that plaintiffs had met their burden of raising a reasonable doubt as to the adequacy of the special committee's investigation because the committee was not advised by independant counsel, but rather by an attorney who had represented hoover in connection with the challenged transaction (see, Stepak v. Addison, 20 F.3d 398, 405; In re PAR Pharm., Inc., Deriviative Litig., 750 F. Supp. 641, 647). Moreover, the report of the special committee was a mere two pages in length with respect to the subject transaction, and failed to document the special committee's procedures, reasoning and conclusions, thus effectively insulating its investigation from scrutiny by the courts (see, In re PAR Pharm., Inc. Derivative Litig., 750 F. Supp. 641, supra).