Shareholder Demands and the Delaware Derivative Action
THE HANDBOOK OF TRADING: STRATEGIES FOR NAVIGATING AND PROFITING FROM CURRENCY, BOND AND STOCK MARKETS, Chapter 12, p. 171, McGraw-Hill Professional, 2010
3 Pages Posted: 10 Jun 2011
Date Written: June 9, 2011
Among the most "interesting and ingenious" corporate "accountability mechanisms" is the shareholder derivative action. An aggrieved investor may demand the independent directors of a corporate issuer to litigate on behalf of the corporation, for harm(s) allegedly committed upon the corporation. This chapter explores who is eligible to sue derivatively and identifies some of the basic requirements to initiate derivative litigation.
Keywords: shareholders, derivative action, delaware law, section 220, corporate law, chancery court, shreholder litigation, board of directors, business judgment, futility
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