Shareholder Derivative Litigation

A shareholder derivative lawsuit is brought by a current shareholder of a corporation, on behalf of the injured corporation, to enforce legal claims belonging to the corporation.  This type of litigation usually involves claims of corporate mismanagement, waste of corporate assets, or self-dealing, and are often asserted against the executive officers and/or directors of the injured corporation.  Shareholder derivative litigation is necessary because the injured corporation’s officers and directors will often refuse to pursue such claims against the corporation’s other officers and/or directors, thereby leaving the corporate wrongdoing unaddressed absent stockholder intervention.