Shareholder derivative lawsuits are a vital component in the corporate governance toolkit, allowing shareholders to step in and advocate for a company’s best interests when it is perceived that the company’s own directors or officers have failed to do so. This is particularly relevant when issues of breach of fiduciary duty, abuse of control, gross mismanagement, fraud, or any conduct harmful to the corporation have occurred. In Florida, the specific legal process and particular requirements for these actions are detailed within the Florida Business Corporation Act (FBCA).
Requirements for Filing a Shareholder Derivative Suit in Florida
To initiate a shareholder derivative lawsuit in Florida, certain procedures must be followed:
- Demand Requirement: A shareholder typically needs to make a demand to the board to address the wrongful act, unless making such a demand would be considered futile.
- Ownership of Stock: The shareholder must have owned stock at the time of the alleged wrongful act and continuously own it throughout the litigation process.
- Filing the Complaint: If the demand is refused, ignored, or foregone due to futility, the shareholder can file a case in court outlining the issues and suggesting the required remedies.
- Litigation Stages: After filing, the litigation process unfolds with discovery, exchanges of information, pre-trial motions, and potentially a trial or settlement.
- Florida Specifics: Florida statutes outline the ‘demand requirement’ more explicitly, including circumstances where it can be bypassed. The FBCA also describes the process for dismissing a derivative suit if it is not in the corporation’s best interest, as determined by an independent panel or the board.
It is important to note that any financial recovery from a shareholder derivative suit is directed back to the corporation and not to the individual shareholders who initiated the action. Additionally, Florida law may allow for the recovery of reasonable attorneys’ fees and costs if the derivative action is successful or yields a substantial benefit to the corporation.
Due to the complexities inherent in derivative lawsuits, it is crucial for shareholders to consult with experienced legal counsel who can guide them through the intricacies of Florida corporate law. If you believe your corporation has suffered due to mismanagement, fraud, or any breach of fiduciary duty, we invite you to reach out to Perez Mayoral P.A. Let us be your ally in seeking justice and upholding the best interests of your corporation.
Am I Eligible For A Shareholder Derivative Lawsuit?
Individual investors or groups of investors can file a shareholder derivative lawsuit. The point of the lawsuit is twofold: redress financial losses the shareholders experienced and prevent further harmful mismanagement of the company. In some cases, the other directors or officers of the company should have taken steps against another officer or director who was negligent or engaging but failed to do so. In this case, the shareholders may take action themselves to rectify the problem.
Corporate misconduct covers a broad array of misdeeds, including breach of duty of loyalty, breach of fiduciary duty, and wasting corporate assets. It also covers more nefarious doings, like fraud or other unlawful activities, backdating stock options, or other forms of self-dealing.
Shareholders may also file a shareholder derivative lawsuit for activities involving inappropriate acquisitions or mergers, consumer protection violations, or workplace safety regulations or environmental laws. Furthermore, you may file a suit against the company’s officers or directors if you suspect they have inflated their executive compensation or inflated financial statements.
How Can A Miami Shareholder Derivative Action Lawyer Help Me?
Whatever type of corporate misconduct, and no matter how hard the offenders try to cover it up, our team of skilled corporate fraud attorneys can uncover it. We help investors and stakeholders just like you achieve meaningful justice and recover your investments.
We start by thoroughly investigating the situation and often use experts in our investigation. Working with a law firm like ours means that you benefit from our resources and experience. We often employ forensic accountants to comb through the company’s financial records, gathering proof of misdeeds or misappropriation.
Once we’ve built a solid case, we can then negotiate a fair settlement for you and any other affected shareholders. Or, if the wrongdoers refuse to settle, then we can argue your case in court. We’re committed to helping you recover your good-faith investment.
Let Us Help You Protect Your Financial Interests
Have you suffered financial losses because of the negligence of company officers you held shares in? Our experienced Miami shareholder derivative action lawyer at Perez Mayoral, P.A. can investigate the matter and file a suit on your behalf to recoup the money you lost. Contact us today to get started.
