[Your Name] [Your Address] [City, State, ZIP Code] [Email Address] [Phone Number] [Date] [Recipient's Name] [Recipient's Address] [City, State, ZIP Code] Re: Motion to Dismiss on Shareholder Derivative Claims Case No. [Insert Case Number] Dear [Recipient's Name], I hope this letter finds you in good health and high spirits. I am writing to you as the legal representative of [Company Name] in response to the recent filing of shareholder derivative claims against our client. We seek your attention and cooperation to evaluate our Motion to Dismiss, which addresses the allegations raised in the complaint. We understand the importance of ensuring that all shareholders' rights are protected, as well as the need for transparency and accountability in corporate governance. However, we firmly believe that the claims made in the complaint lack merit and fail to substantiate any wrongdoing on the part of our client's board of directors or executive management. Our Motion to Dismiss is based on various legal grounds and aims to showcase the invalidity of the claims asserted. The core arguments presented in our motion include: 1. Lack of standing: We will demonstrate that the plaintiffs lack the standing to assert derivative claims on behalf of the company due to their failure to meet the necessary requirements as prescribed under Michigan state law. 2. Failure to make a demand: The complaint fails to allege any specific reasons why a demand upon the board of directors to take corrective action would have been futile. We will illustrate that the failure to make a pre-suit demand undermines the plaintiffs' claim and necessary prerequisites for asserting derivative claims. 3. Failure to plead with particularity: The complaint inadequately alleges specific facts to support the claims made, thereby failing to meet the heightened pleading standards required for shareholder derivative claims. 4. Business judgment rule: Our motion will emphasize that the board of directors exercised their business judgment in making the decisions challenged by the plaintiffs, which are protected under the business judgment rule. Our legal team has meticulously researched and prepared our Motion to Dismiss, providing comprehensive legal arguments and precedent-setting cases that favor the dismissal of these shareholder derivative claims. We are confident that the court will recognize the lack of merit in the plaintiffs' allegations and grant our motion accordingly. We kindly request your cooperation in reviewing our Motion to Dismiss and considering the arguments we have presented. Furthermore, we are open to discussing any potential resolution of this matter that aligns with our client's best interests, as well as the principles of corporate governance. Should you have any questions or require further information regarding this matter or our motion, please do not hesitate to contact me at [Your Phone Number] or [Your Email Address]. We look forward to your positive response and a swift resolution to this dispute. Thank you for your attention to this matter. Sincerely, [Your Name] [Your Title] [Company Name]
Oakland Michigan Sample Letter regarding Motion to Dismiss on Shareholder Derivative Claims
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FAQ
Verified Shareholder Derivative Complaint means the Verified Shareholder Derivative Complaint For Violations of the Securities Exchange Act of 1934, Breach of Fiduciary Duty, Waste of Corporate Assets, and Unjust Enrichment filed by Peter Derrer on or about April 12, 2010.
Derivative Lawsuit Moreover, a corporate shareholder may not bring a derivative action against a corporation's officers or board of directors simply because he/she disagrees with a decision made on behalf of the corporation.
3. Who files these actions? A shareholder derivative action is brought by a shareholder or group of shareholders. Generally, the plaintiff must be a legal or beneficial owner of stock security, or other equityoptions, warrants, or other rights to purchase or receive stock do not confer standing.
Some states allow a person to bring a derivative suit as long as he or she held the company's stock at the time of the incident that gave rise to the suit. Others require that the shareholder owns stock in the company at the time of the inciting action and continuously throughout the resolution of the lawsuit.
Commonly, derivative suits allege improper actions by those in charge of the entity including, self-dealing by those in charge, entity mismanagement, or breaches of the duties of loyalty and care owed to the entity and the entity's owners. Direct claims are those seeking redress to the individual directly.
: a suit brought by a shareholder on behalf of a corporation or by a member on behalf of an association to assert a cause of action usually against an officer which the corporation or association has itself failed to assert for its injuries. called also derivative suit, shareholder's derivative suit.
Definition. A shareholder derivative suit is a lawsuit brought by a shareholder on behalf of a corporation. Generally, a shareholder can only sue on behalf of a corporation when the corporation has a valid cause of action, but has refused to use it.
A derivative claim (or derivative action) is a claim brought or continued by a shareholder on behalf of the company in relation to a breach of duty by a director. It will usually be used in circumstances when the majority wrongfully prevent the company bringing or proceeding with such a claim itself.
Definition. A shareholder derivative suit is a lawsuit brought by a shareholder on behalf of a corporation. Generally, a shareholder can only sue on behalf of a corporation when the corporation has a valid cause of action, but has refused to use it.
A derivative action permits a minority shareholder, as representative of all of the other shareholders, to institute proceedings on behalf of the Company in an attempt to redress a wrong perpetrated by the majority shareholders on the Company.
