Shareholder Derivative Lawsuit
/ˈʃɛrˌhoʊldər dɪˈrɪvətɪ ˈlɔˌsuːt/
Definitions
- (n.) A lawsuit brought by a shareholder on behalf of a corporation against third parties—often insiders such as executives or directors—alleging harm to the corporation due to breach of fiduciary duty or misconduct that the corporation has failed to address.
The shareholder derivative lawsuit alleged that the company’s board members violated their fiduciary duties, causing financial harm to the corporation.
Forms
- shareholder derivative lawsuit
- shareholder derivative lawsuits
Related terms
See also
Commentary
Shareholder derivative lawsuits are procedural mechanisms allowing minority shareholders to vindicate corporate rights when management fails to act; careful compliance with demand requirements and standing rules is critical.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.