Shareholder Derivative Actions
Shareholder derivative actions are the principal means of holding corporate fiduciaries accountable for many kinds of misconduct, including excessive executive compensation, self-dealing transactions, and failures of oversight that lead to major violations of environmental, health & safety, anti-bribery and securities laws.
Derivative actions are subject to a unique procedural hurdle: the “demand requirement.” This requirement obligates a plaintiff to show that corporate directors are incapable or unwilling to pursue the wrongdoing, and subjects the case to an unusually high level of scrutiny at its outset. Consistent with our commitment to early investment, we utilize “books and records” demands, consulting experts, and independent investigation to develop the strongest complaint possible prior to initial filing.
Where fiduciary breaches have not resulted in a private benefit to directors and officers that justifies a monetary recovery, the most effective remedy is often corporate governance reforms that strengthen internal risk management systems, change management incentives, and improve accountability within the corporation.
To discuss shareholder derivative matter, please contact Ethan Wohl at 212 758 4097 or ewohl [at] wohlfruchter [dot] com. Or if you prefer, please complete our potential matter form and we will contact you.