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.

derivative suit

References in periodicals archive ?
23) Through a combination of creative pleading by plaintiffs, forgiving amendments by legislatures, and lenient interpretations by courts, (24) such dire predictions did not come to passes and indeed it was not long before commentators proclaimed the revival of the derivative suit.
Academics and practitioners now recognize the likelihood that litigation, similar to CalSTRS's derivative suit, will follow allegations of FCPA violations.
Advertisements for participation in shareholders derivative suits have traditionally been published in the Wall Street Journal," Baker says.
Second, the dataset includes a number of cases that may not reflect the typical derivative suit.
the case of a shareholder derivative suit, lead plaintiffs may not have
There's a debate over to what extent can a derivative suit really be covered.
the court held a D&O policy did not provide coverage for an investor's securities fraud action and related shareholder's derivative suit for the corporation's failure to disclose of pollution activities; the D&O policy excluded loss "arising out of" actual discharge of pollutants.
7) One factor supporting this transformation (8) was the use of the shareholder derivative suit system to buttress the increased emphasis on an independent and effective board of directors.
Powers Taylor, LLP is a boutique 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.
Palmer's practice is devoted to defending companies, officers and directors and audit firms in securities disputes, class actions, derivative suits, business judgment and fiduciary claims, M&A litigation, SEC matters and corporate investigations, and counseling clients regarding privilege, corporate governance, and ethics.