DGCL Sec. 327 - Derivative actions
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In order to have standing in derivative litigation, a stockholder must have already been a stockholder at the time of the bad act that gave rise to the litigation. This requirement prevents people from observing some bad act and then buying into a lawsuit.
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1
TITLE 8
2Corporations
3CHAPTER 1. GENERAL CORPORATION LAW
4Subchapter XIII. Suits Against Corporations, Directors, Officers or Stockholders
56
§ 327. Stockholder's derivative action; allegation of stock ownership.
7In any derivative suit instituted by a stockholder of a corporation, it shall be averred in the complaint that the plaintiff was a stockholder of the corporation at the time of the transaction of which such stockholder complains or that such stockholder's stock thereafter devolved upon such stockholder by operation of law.
88 Del. C. 1953, § 327; 56 Del. Laws, c. 50; 71 Del. Laws, c. 339, § 73.;
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May 22, 2017
DGCL Sec. 327 - Derivative actions
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Brian JM Quinn
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