The Power of a Derivative Lawsuit - Protect Minority Shareholder Interests

The Power of a Derivative Lawsuit

On behalf of Daniel Watkins of Watkins Firm, A Professional Corporation
Posted On January 31, 2018

The Power of a Derivative Lawsuit

What is the power of a derivative lawsuit for minority shareholders in San Diego?  What are the rights of a minority shareholder in San Diego and across California?  What should you do if you are concerned about the direction of the corporation or the decisions of executive management or the Board of Directors?  The power of a derivative lawsuit is simply this:

A derivative lawsuit stands up for what is best for the corporation and protects the company while asserting your rights as a minority shareholder.

In a derivative lawsuit the minority shareholder(s) essentially legally step into the shoes of the Board of Directors to protect the corporation itself from mismanagement or violations of fiduciary duties.  The lawsuit is filed on behalf of the corporation and all financial proceeds are given to the corporation itself.  This enhances your minority position in several ways:

  1. It puts power and authority behind your position as a minority shareholder and forces those in the majority or executive leadership to take your position(s) seriously
  2. It can put an immediate stop to abuses of power, violations of fiduciary duty and other actions which threaten the present or future success of the corporation
  3. It will open the door to a negotiated settlement to correct the issues at hand or provide an exit strategy which protects or enhances the value of your minority position

Shareholder derivative lawsuits are quite legally complicated, and there are other alternatives to resolve disputes between shareholders in a corporation.  The Watkins Firm takes a unique approach tor resolve these disputes in a timely and cost-effective manner.  When initial tactics are unsuccessful in accomplishing your goals, or when the actions of the majority interests or Directors are placing the corporation at risk there is no substitute for the power of a derivative lawsuit in San Diego or anywhere in California.  We invite you to review the recommendations of our clients and contact us or call 858-535-1511 for a free consultation.

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9915 Mira Mesa Blvd., Suite 130
San Diego, CA 92131

Telephone: (858) 535-1511
Fax: (858) 535-1581