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Derivative Actions

Practices

Corporate officers and directors are required to fulfill certain fiduciary obligations to both the shareholders of a company and the company itself, when taking corporate action. When these officers and directors do not act in the best interests of the shareholders or the corporation, or when they take corporate action that harms the corporation, a shareholder may be entitled to commence an action derivatively on behalf of the corporation to recover the damage that the company has suffered. This can often occur in related party transactions, in which corporate officers and directors who are tasked with approving a corporate transaction stand on both sides of the transaction. The derivative action is one of the major tools which shareholders can use to ensure that the companies in which they are invested adhere to appropriate corporate governance standards.

The Grant Law Firm has extensive experience in recognizing when a derivative action exists and in litigating such actions. This experience includes determining when a pre-suit demand for action must be made upon a wronged corporation’s board of directors, a requirement under many statutes, and has a record of successfully arguing that a pre-suit demand upon a particular board would have been futile, thus enabling the suit to proceed.

If you or a client is aware of a company that has suffered damage as a consequence of corporate malfeasance, please contact lgrant@grantfirm.com or complete our Contact Us form on this website.