Shareholder Derivative Litigation

We have substantial experience litigating shareholder derivative lawsuits. A derivative lawsuit is brought by a shareholder of a corporation on the corporation’s behalf. Such cases usually involve claims of mismanagement, waste of corporate assets, or self-dealing, and often involve claims against the officers or directors of the corporation. Shareholder derivative litigation often is necessary because the corporation, which is run by officers and directors, cannot bring suit against one of its own, even if serious wrongdoing has occurred. To prosecute a derivative suit, the plaintiff must be a shareholder of the company, hold the shares at the time of the alleged wrongdoing, and continue to hold stock for the duration of the lawsuit. Because a derivative suit seeks to assert rights on behalf of the company, any benefit from the suit goes directly to the company. This result, in turn, could positively affect the company’s stock price, thereby benefiting all of its current shareholders.