Direct and Derivative Suits | Brian JM Quinn | February 22, 2013


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Direct and Derivative Suits

by Brian JM Quinn Show/Hide

Shareholders may bring different kinds of litigation against the corporation. Direct suits are brought on behalf of the shareholder in the shareholder's position as shareholder. Derivative suits are brought by shareholders on behalf of the corporation and seek to vindicate the rights of the corporation.

Understanding the distinction between direct and derivative suits can be confusing. However, there is a coherent test for determining which is which.


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  1. 1 Show/Hide More DGCL Sec. 327
    Original Creator: Brian JM Quinn
    Derivative Suits
  2. 3 Show/Hide More Tooley v. Donaldson Lufkin, & Jenrette, Inc.
    Original Creator: Brian JM Quinn
    Test for determining whether shareholder litigation is direct or derivative.
  3. 4 Show/Hide More Gentile v. Rossette
    Original Creator: Brian JM Quinn
    Because there are important procedural hurdles to bringing a derivative suit, it oftentimes becomes an important point of contention between the parties whether the particular litigation is direct or derivative. This case is an example of that in action.

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January 22, 2014

corporate derivative shareholder litigation direct

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Brian JM Quinn

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