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07/03 What is Derivative Litigation?

A BRIEF OVERVIEW OF DERIVATIVE LITIGATION A shareholder derivative suit is a type of litigation brought by one or more shareholders on behalf of a corporation against third parties (generally the officers and directors of the corporation) to remedy harm done to the corporation because of the actions (or inaction) by the officers and directors. In a derivative suit, the plaintiff shareholders do not sue on a cause of action on behalf of themselves as individuals. Instead, they sue as a representative of the company on a cause of action on behalf of the corporation. The fundamental basis of a shareholder […]

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