Several shareholders, after a recent disclosure of fraud on the part of the corporation’s directors, have decided to sue the corporation. Such a suit is known as a: strike suit. class action suit. litigation suit. derivative action suit.

Prior to filing a derivative action suit, the litigant shareholder must perform which of the following actions? notify all of the shareholders regarding their choice to opt out of the suit. request the board to cease and desist and/or file the action themselves. file a claim in the local court for a temporary restraining order. nothing, as the shareholders are entitled to file their suit without further ado.

If shareholders win the action in a derivative action suit, what is the likely result? The company must pay the shareholders whatever damages the court imposes. The directors must pay the shareholders whatever damages the court imposes. The directors must pay the company whatever damages the court imposes. The company must pay the shareholders' legal fees.

© 2003 - 2024 National Paralegal College