Sec. 34-522. Derivative actions.
Sec. 34-522. Derivative actions. (a) A beneficial owner may bring an action in
the Superior Court in the right of a statutory trust to recover a judgment in its favor if
trustees with authority to do so have refused to bring the action or if an effort to cause
such trustees to bring the action is not likely to succeed.
(b) A beneficial owner may not commence or maintain a derivative action unless
the beneficial owner is a beneficial owner at the time of bringing the action and the
beneficial owner (1) was a beneficial owner at the time of the transaction of which the
beneficial owner complains or became a beneficial owner through transfer by operation
of law or pursuant to the terms of the governing instrument of the statutory trust from
a person who was a beneficial owner at the time of the transaction, and (2) fairly and
adequately represents the interests of the statutory trust in enforcing the right of the
statutory trust.
(c) In a derivative action, the complaint shall set forth with particularity the effort,
if any, of the plaintiff to secure initiation of the action by the trustees, or the reasons for
not making the effort.
(d) If a derivative action is successful, in whole or in part, or if anything is received
by a statutory trust as a result of a judgment, compromise or settlement of any such
action, the court may award the plaintiff reasonable expenses, including reasonable
attorneys' fees. If anything is so received by the plaintiff, the court shall make such
award of plaintiff's expenses payable out of such proceeds and direct plaintiff to remit
to the statutory trust the remainder thereof, and if such proceeds are insufficient to
reimburse plaintiff's reasonable expenses, the court may direct that any such award of
plaintiff's expenses or a portion thereof be paid by the statutory trust.
(e) A beneficial owner's right to bring a derivative action may be subject to such
additional standards and restrictions, if any, as are set forth in the governing instrument of
the statutory trust, including, without limitation, the requirement that beneficial owners
owning a specified beneficial interest in the statutory trust join in the bringing of the
derivative action.
(f) A derivative action may not be discontinued or settled without the court's approval.
(P.A. 96-271, S. 236, 254.)
History: P.A. 96-271 effective October 1, 1997.