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 ?
BANKING AND CREDIT NEWS-October 25, 2018--Judge cancels settlement in shareholder suit involving Goldman Sachs
M2 EQUITYBITES-October 25, 2018--Judge cancels settlement in shareholder suit involving Goldman Sachs
Global Banking News-October 25, 2018--Judge cancels settlement in shareholder suit involving Goldman Sachs
Shareholder Suit Alleges Pizza Chain Papa John's Hid Executives' Misbehavior
So what can be done to improve the social image of the shareholder suit? First, as Cox suggests, shareholder suits should explicitly elevate the goal of deterrence over that of compensation and call on individual defendants to make contributions to the settlement to increase the suit's deterrence value.
For example, in considering whether to disregard the direct-derivative distinction for a shareholder suit in the close corporation, the absence of harm to creditors is an important consideration in allowing a minority holder to maintain as a direct action a suit that customarily must be brought on behalf of the corporation as a derivative suit.
So a D&O policy that can respond to a shareholder suit that may arise from a cybersecurity event is very important to have in place."
An example of the importance of compliance was seen a few years ago, when Dow's compliance program was cited by a Delaware court as a reason why a shareholder suit related to bribery allegations was dismissed.
The scandal has led to a civil shareholder suit, with Avon Pension Fund as lead plaintiff, alleging that News Corp., Murdoch, his son James, Brooks and former Dow Jones & Co.
The report says prior to Rwanda, in 2006 Tanzania passed a new company Act to strengthen investor protections by codifying directors duties and shareholder suit mechanisms and providing greater access to company books.
District Judge Michael Telesca, in a 42-page decision, dismissed the shareholder suit and wrote that the suit failed to explain why company statements were false nor how they affected the financial condition of the company.
SEARS AND LAMPERT CLEARED IN SHAREHOLDER SUIT: A federal appeals court upheld a lower court's decision in favor of Sears Holdings Corp., its chairman Edward Lampert and former Kmart chief executive officer Julian Day.