Can a shareholder bring a derivative action against the Corporation for injury to their interest as a shareholder?

California, United States of America


The following excerpt is from Pricaspian Dev. Corp. v. Ficeto, B239435 (Cal. App. 2014):

"Shareholders may bring two types of actions, 'a direct action filed by the shareholder individually (or on behalf of a class of shareholders to which he or she belongs) for injury to his or her interest as a shareholder,' or a 'derivative action filed on behalf of the corporation for injury to the corporation for which it has failed or refused to sue.' [Citation.] 'The two actions are mutually exclusive: i.e., the right of action and recovery belongs either to the shareholders (direct action) or to the

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corporation (derivative action).' [Citation.]" (Schuster v. Gardner (2005) 127 Cal.App.4th 305, 311-312.)

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