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Shareholder Derivative Suit

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Stockholder Derivative Suit
A lawsuit filed by one or more shareholders of a publicly-traded company in the name of the company. Often, this lawsuit is filed against a member of the company's management who committed an illegal, unethical, or negligent act. Directors' and officers' liability insurance can protect the management from losses as the result of one of these lawsuits. They are also called derivative suits and derivative action.

shareholder derivative suit
A special type of class action lawsuit filed by one shareholder or by a limited number of shareholders on behalf of all of the other shareholders in a firm. An example is such a suit filed against a mutual fund's management in which the litigants claim excessive management and distribution fees.


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He has represented public companies, boards of directors, audit and special committees of boards, and individual directors, officers and employees in SEC enforcement inquiries, Department of Justice investigations, securities class actions, shareholder derivative suits, internal corporate investigations, and a variety of other securities and finance-related litigation and regulatory matters.
Aside from that, a business lawyer has to attend to litigation work, which includes shareholder dispute, shareholder derivative suits, breach of partnership, confidentiality agreement, non-disclosure agreement and a host of other civil litigations including debt collections.
To address the analogous problem in the for-profit context, Delaware courts have required a stringent set of conditions to obtain before a shareholder derivative suit may survive the board's motion to dismiss.
 
 
 
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