stockholder derivative suit

(redirected from Shareholder Suits)

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 unusually high volume of shareholder suits DryShips and Economou have faced throughout the company's history implies at least one rationale for going private -- theoretically, less money will have to be spent on legal representation going forward.
More specifically, now that central banks have said the issue is linked to financial stability, no executive can ignore this without facing the risk of shareholder suits.
I would advocate shareholder suits to account for this negligence.
Similarly, a rise in public company shareholder suits from cyber incidents that have generated large losses and reputational damage is leading to greater demand for cyber coverage specific to directors' and officers' liability policies.
The two shareholder suits also allege that Intel and its company officers violated securities laws "by making statements about Intel's products and internal controls that were revealed to be false or misleading by the disclosure of the security vulnerabilities."
819, 822 n.8 (1981); Reinier Kraakman, Hyun Park & Steven Shavell, When Are Shareholder Suits in Shareholder Interests?, 82 GEO.
The class action suit is a consolidation of 13 shareholder suits filed after GTAT's disastrous deal with Apple collapsed, resulting in Merrimack-based company going bankrupt in October 2014 with $1.3 billion in debt--about a year after it was signed.
The Social Meaning of Shareholder Suits. Although Cox maintained his scholarly focus on corporate and securities law issues, his wide-ranging response to law and economics led him to draw on economics and psychology and eventually emerging scholarship around social meaning and social norms.
They address the economics of the firm, the role of the board of directors, state competition for corporate charters, the role of hostile takeovers and board defenses against them, the effectiveness of shareholder suits and other agency mechanisms, and other perspectives like political theory and organizational law.
Solomon-like, the Delaware legislature in 2015 split the baby by amending the Delaware General Corporation Law to authorize forumselection bylaws and to prohibit charter or bylaw provisions that would shift to the plaintiff defense costs incurred in connection with shareholder suits that were not successfully concluded.
D&O policies respond to shareholder suits involving financial assets of a corporation, while cyber policies pay for costs to handle the actual breach.
Shareholder claims typically assert that management has damaged the value of the company, and hence the value of their ownership; this can include areas such as brand and market reputation." That certainly applies to Volkswagen, with shareholder suits already in the works.