Derivative Proceedings and Shareholder Class Actions: AB 3123 (2013)
Requires a written demand be made on the corporation for
Requires a written demand be made on the corporation for derivative suits. The new demand requirement grants the company 90 days to respond and stays all proceedings, including discovery, during this period. It also allows the corporation to move for a stay of proceedings if it is currently conducting an investigation. Raises the amount of ownership in the company that a shareholder must have in order to avoid posting security in any shareholder class action or derivative suit. Requires that the shareholder hold ownership at the time of filing suit and remains a shareholder for the duration of the suit. Next and significantly, the court shall dismiss the case if the corporation moves for dismissal after specified groups have determined “in good faith, after conducting a reasonable inquiry upon which its conclusions are based, the maintenance of the derivative proceedings is not in the best interest of the corporation.” The specified groups include: (1) a majority vote of shareholders; (2) a majority vote of independent directors; (3) a majority vote of a committee appointed by independent directors; (4) a panel appointed by the court at the request of the corporation. Finally, introduces a fee shifting provision which requires plaintiffs to pay the corporation if the suit was brought without the exercise of reasonable diligence, cause or with improper purpose.
Latest News
View all news
Poll Shows Public Disapproval for COVID-19 Lawsuits; Government Aid for Small Businesses Overwhelmingly Preferred
With a new presidential administration officially at the helm, public support for aid to small businesses and others impacted by the pandemic remains high. A new survey released today by the American Tort Reform […]
Trial Lawyers’ Rush Amendment Passes IL House in Early Morning Hours, Heads to Governor
ATRA’s statement on passage of Amendment 1 to Illinois House Bill 3360
IL Lawmakers Rush to Amend Bill for Trial Lawyers’ Gain, Ignore COVID-19 Liability Protections
ATRA’s statement on Amendment 1 to Illinois House Bill 3360
Statement Concerning Violent Mob Attack on U.S. Capitol
ATRA President Tiger Joyce released the following statement in response to the unprecedented attack on the U.S. Capitol building on January 6:
Congress Fails to Protect Small Businesses & Others from COVID-19 Liability
ATRA voices its disappointment as Congress fails to include liability protections in its latest COVID-19 relief package.
Courts in ‘Judicial Hellholes’ Less Likely to Abide by SCOTUS Precedent
ATRA President Tiger Joyce writes in this op-ed about a growing trend of state courts bucking SCOTUS precedent when it comes to personal jurisdiction.