SH Derivative Suit

Question 1

Requirements to file derivative suit?

Answer 1

Owned stock at time of act/omission

Remain SH throughout proceedings

Fairly/adequately represent corp interests

Make a written demand on corp and wait 90 days

Question 2

When would SH not have to wait 90 days?

Answer 2

Demand is rejected

The corporation would suffer irreparable injury if made to wait 90 days

Question 3

Derivative action dismissed if?

Answer 3

Court appointed panel
Or
Maj of disinterested directors

Determine in good faith after a review that the derivative action is not in the BIC.

Question 4

Who does recovery go to if a derivative suit is successful?

Answer 4

To the corporation

Question 5

How much can be recovered from Director found liable in derivative action?

Answer 5

Up to $100,000 or past 12 months of cash compensation- whichever is GREATER

Question 6

What if derivative suit actually benefitted the corp?

Answer 6

Corp may be ordered to pay plaintiffs reasonable expenses