stockholder 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.

stockholder derivative suit

A lawsuit filed by one or more of a company's stockholders in the name of the company. A derivative suit is filed when the firm's management will not or cannot sue in the name of the company. For example, a stockholder may enter a derivative suit against the firm's chief executive officer to recover funds from a questionable or an improper act by that officer. Also called derivative suit.
References in periodicals archive ?
Barnhouse, formerly a partner in Dallas' Carrington Coleman Sloman & Blumenthal, has a commercial litigation background that includes employment matters, securities, securities fraud, breach of contract, defamation, RICO, shareholder derivative suits, bankruptcy, and other high-stakes litigation in state and federal court.
Consequently, failure to conduct pre-closing FCPA due diligence introduces significant risk that could deplete the value of the deal; open the surviving entity to large penalties, fines and disgorgement of any ill-gotten gains; and expose the officers and directors to unwanted shareholder derivative suits.
office, where he represents clients in high-stakes securities enforcement and litigation matters including, SEC investigations and enforcement actions (civil and administrative), securities class actions, shareholder derivative suits and other civil litigation and arbitrations, FINRA and PCAOB investigations, and criminal inquiries by the Department of Justice and state attorneys general.
Shareholder derivative suits developed as a mechanism by which principals (shareholders) could force their agents (the board members) to act in their best interests when the agents otherwise might not.
In addition to shareholder derivative suits and class action suits for board breaches of duty, exclusions from federal plans are exposures faced by health care boards.
class actions, as well as shareholder derivative suits on behalf of certain of the Settling Funds.
The Branham Law Group, LLP has extensive experience in securities and commercial litigation and handled claims of investor fraud, partnership oppression, shareholder derivative suits, and class actions of all types.
Many shareholders, urged on in part by their proxy advisers, are doing just that, resulting in what Thomson Reuters reported as a "surge" in shareholder derivative suits claiming directors breached their fiduciary duty by greenlighting a pay package that shareholders had given a thumbs down.
Halligan urges officers, directors and top managers to involve themselves actively with trade secret management and security to avoid both civil and criminal liability, as well as shareholder derivative suits for breach of the fiduciary duty to protect intellectual property assets.
Powers Taylor, LLP is a boutique Dallas litigation law firm that handles a variety of complex business litigation matters, including claims of investor and stockholder fraud, shareholder oppression, shareholder derivative suits, and security class actions.