Our experts have wide experience in representing Shareholder litigation, members, directors, and companies in business disputes as shareholder derivative lawsuits. We can assist you with all aspects of losses as a result of negligent behavior by a corporation and its directors, or by third parties.

What Is a Shareholder Derivative Action?

A shareholder derivative lawsuit is a legal action filed by a Shareholder litigation on behalf of a corporation. Shareholder derivative actions are a very important way for those who own an interest in company to protect themselves. We have represented diverse members involving valuation as part of shareholder disputes. We have also experience in analyzing, modeling and valuing businesses in different situations and in multiple industries and regions.

Shareholder derivative actions allow shareholders to use the legal system to make a claim against insiders. This action can raise many complicated legal issues and it is imperative to consult with a qualified lawyer.

Some examples of the types of behavior that can result in shareholder derivative actions being filed include:

  • Wasting of corporate assets.
  • Executive, manager or board member breach of fiduciary duty.
  • Duty of loyalty: corporate insiders acting in their own best interests instead of the company’s best interests.
  • Malpractice, Illegal, unlawful or fraudulent activity by company considers.
  • Conflicts of interest between the corporation and insiders.
  • Acquisitions.
  • Backdating of stock options.
  • Wasting of corporate assets.
  • Accounting problems or false financial statements.
  • Executive compensation improprieties.
  • Violation of environmental protection laws or consumer protection laws.

The rules and procedures for derivative lawsuits vary by jurisdiction. Generally, before initiating a lawsuit, a shareholder must demand that the board take legal action. Then, if the board rejects the demand or refuses to act, the shareholder may sue. In short, the goal of a derivative lawsuit is to invoke a corporate right that the directors have not enforced.

Our professionals have proven experience handling derivative lawsuits. Contact our office to schedule a consultation.

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