Does a shareholder have a right to bring a derivative action against a corporation?

MultiRegion, United States of America

The following excerpt is from In re First Capital Holdings Corp., 146 BR 7 (Bankr. C.D. Cal. 1992):

Shareholders have a right, outside of bankruptcy, to bring an action on behalf of a corporation, where the corporation does not bring the action on its own. A shareholder derivative suit is an action brought by one or more stockholders of a corporation to enforce a corporate right, or to prevent or remedy a wrong to the corporation, where the corporation fails or refuses to take appropriate action for its own protection. The injury alleged in such an action is to the corporation, and not to the plaintiff's individual interest as a stockholder. Reed v. Norman, 152 Cal.App.2d 892, 897, 314 P.2d 204 (1957).

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