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.
ATRA President Tiger Joyce writes how companies that end arbitration face the risk of consumer class actions, in the face of plaintiffs firms ramping up mass arbitration proceedings.
We are saddened to hear of former Missouri state Senator Ed Emery’s untimely death. Senator Emery was not only a champion of tort reform, but a pillar in his community. […]
The New York trial bar may get yet another gift from the state lawmakers seemingly tied around their finger.
Lawsuit abuse across the U.S. results in more than $160 billion in excessive tort costs
Financial benefit of reforming Missouri’s tort system could support an additional 20k+ jobs & $3.38B in increased economic activity
$7 million spent in Quarter 1 of 2021 to air nearly 61,000 local legal services TV ads in Illinois