Shareholder Derivative Litigation FAQs

The team at Robbins LLP is here to answer questions about shareholder derivative actions. Contact us today.

What Is A Shareholder Derivative Action?

A shareholder derivative action is a lawsuit brought by a shareholder for the benefit of a corporation, often to remedy breaches of fiduciary duty by officers and directors. Remedies commonly sought in derivative actions include corporate governance reforms designed to prevent future fiduciary misconduct, the removal of officers or directors whose misconduct injured the corporation, monetary payments to remedy damages incurred by the company, and repayment of funds obtained illegally.

What Is The Difference Between A Shareholder Derivative Action And A Securities Fraud Class Action?

In a shareholder derivative action, the representative plaintiff pursues claims on behalf of a corporation and benefits indirectly as a shareholder from any corporate governance reforms or monetary recovery obtained for the corporation. In a securities class action, the lead plaintiff pursues claims on behalf of themselves and a class or classes of similarly situated shareholders to obtain monetary and other benefits directly for the members of the class.

What Are My Responsibilities As A Plaintiff In A Shareholder Derivative Action?

As a shareholder, you will pursue a claim on behalf of the corporation, not for yourself personally. As a plaintiff in a derivative class action, you must act in the best interest of the corporation and all shareholders. Your goal is to ensure corporate accountability and transparent, honest, and effective corporate governance. You are responsible to stay informed about significant developments in the case as you work with one or more attorneys to make important strategic decisions over the course of the litigation. As a shareholder plaintiff, you most likely need to continue to own stock in the company to pursue this type of litigation.

If I File A Shareholder Derivative Action, Can I Still Recover My Share Of The Proceeds In A Related Class Action Settlement?

Yes. If you are a member of the class, you are entitled to file a claim to recover your portion of the class action settlement proceeds.

Does It Cost Anything To Participate In A Shareholder Derivative Action?

No. Representative plaintiffs in actions brought by Robbins LLP are not responsible for paying attorneys’ fees or expenses. All costs and expenses of the litigation are advanced by Robbins LLP. We only recover our fees and costs – paid for by defendants – if we are successful in obtaining a substantial benefit for the corporation.

How Do I Retain Robbins LLP To Represent Me In A Shareholder Derivative Action?

Call Robbins LLP at 1-800-350-6003 or contact us online to speak to one of our attorneys about your concerns.

Having information at your fingertips is easier than ever. Enroll in Robbins LLP’s free investment monitoring service, Stock Watch, for notifications of corporate misconduct impacting the value of your investments, advice on how to hold corporate officers and directors accountable for their misconduct, and to receive information about class action settlements.