Shareholder and
Derivative Litigation

Corporate officers and directors are constantly subjected to temptations that put their own interests at odds with those of the shareholders they purport to represent. Whether the temptation arises in the form of back-dated stock options or as preferential treatment in a proposed merger, the shareholders are entitled to expect that the company’s affairs will be managed at all times in their best interests.

Traditionally, a corporation’s management is responsible for prosecuting claims on behalf of the corporation. However, when management fails to take action in the best interests of the corporation, shareholders may bring a derivative action to assert the corporation’s rights and protect shareholder interests. Sbaiti & Company has served as lead counsel in many shareholder derivative cases in both federal and state courts brought to benefit companies involving mismanagement and corporate abuse to the ultimate benefit of its shareholders.

Examples of the corporate misconduct that can support a shareholder derivative action in a given case include the following:

  • Securities fraud, accounting fraud, or tax fraud
  • Improprieties with respect to executive compensation
  • Books and records requests
  • Breach of fiduciary duty claims against corporate directors
  • Material non-disclosure of facts essential to the evaluation of a merger proposal
  • A pattern of business decisions that knowingly expose the corporation to losses due to consumer protection violations, antitrust violations, environmental damage, back tax liability, or other unnecessary risks

If you are a shareholder of a corporation that has lost value due to improper management practices or outright fraud, contact a knowledgeable lawyer Sbaiti & Company, PLLC.

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