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 ?
The results of such provisions become apparent when measuring the ease of shareholder suits within Africa.
HP is involved in a number of shareholder suits, relating to, among other things, its November announcement of the charge relating to its Autonomy acquisition, it said in the filing.
Proceeds, if any, from derivative shareholder suits are typically collected from insurance policies protecting directors and officers of large corporations from personal liability.
Legal experts also said outside auditors might be criminally liable, while the company could face shareholder suits.
In another filing, the SEC said because of Jaeger's experience as a mergers and acquisitions attorney at Ropes & Gray, as general counsel for Cabletron during shareholder suits alleging accounting fraud, and as the revenue recognition expert, he was much more involved in Cabletron's detailed operations well before, during and after the spinoff, despite Jaeger's claim to the contrary.
Travis Laster, who was appointed in 2009, has been vociferously critical of the nature of some shareholder suits, saying they feature warrantless claims and mainly benefit plaintiffs firms (see "Character Counts").
Should investors be at all concerned about class action shareholder suits that have been filed against Finisar?
Teleconferences and webinars for the same period cover topics such as: courtroom practices, consumer product safety, IP and domain names, shareholder suits, stock ownership plans, commercial litigation, lead paint, class action against hospitals, presenting quantitative evidence and benzene.
Federal law requires that shareholder suits be brought within two years when investors should know they have a claim, he said.
Justice Anthony Kennedy, writing for the majority (joined by Chief Justice John Roberts and Antonin Scalia, Clarence Thomas and Samuel Alito), declined to expand shareholder suits to a "remote" class of defendant.
To identify these coverage issues, it is useful to note the types of suits being filed: borrower lawsuits against lenders; borrower lawsuits against investment banks; lender lawsuits against banks; shareholder suits against lenders; individual investor lawsuits; and regulators' suits against lenders.
The root problems remain and they are growing more pronounced and visible with increasing government regulations, shareholder suits, employee turnover and rising litigation.