derivative suit

(redirected from Shareholders' derivative action)
Also found in: Wikipedia.

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.

derivative suit

References in periodicals archive ?
30, 1993, Judge Flier of the Los Angeles Superior Court granted final approval to a proposed settlement of a shareholders' derivative action filed on behalf of Westminster against the board of directors, certain officers, and certain investment bankers.
OTCBB: SCEP) reported today that a federal district court judge in Tampa, Florida has dismissed a shareholders' derivative action brought by three former directors of the Company, William H.
Plaintiffs have also sued Defendants on behalf of BFF (in favor of BFF), in a shareholders' derivative action, for RICO Act violations, including conspiracy, in violation of RICO, 18 U.
Kadel had failed to properly file the lawsuit as either a shareholders' derivative action or as an appraisal under Ohio law after the merger.
The Company is also a party to a shareholders' derivative action.