608.601 Member’s derivative actions.
608.601 Member’s derivative actions.
(1) A person may not commence a proceeding in the right of a domestic or foreign limited liability company unless the person was a member of the limited liability company when the transaction complained of occurred or unless the person became a member through transfer by operation of law from one who was a member at that time.
(2) A complaint in a proceeding brought in the right of a limited liability company must be verified and allege with particularity the demand made to obtain action by the managing members of a member-managed company or the managers of a manager-managed company and that the demand was refused or ignored. If the limited liability company commences an investigation of the charges made in the demand or complaint, the court may stay any proceeding until the investigation is completed.
(3) The court may dismiss a derivative proceeding if, on motion by the limited liability company, the court finds that one of the groups specified in paragraphs (a)-(c) has made a determination in good faith after conducting a reasonable investigation upon which its conclusions are based that the maintenance of the derivative suit is not in the best interests of the limited liability company. The limited liability company shall have the burden of proving the independence and good faith of the group making the determination and the reasonableness of the investigation. The determination shall be made by:
(a) A majority vote of independent managing members of a member-managed company or of independent managers of a manager-managed company present at a meeting of the managing members of a member-managed company or of managers of a manager-managed company, if the independent managing members or managers, as applicable, constitute a quorum;
(b) A majority vote of a committee consisting of two or more independent managing members of a member-managed company or of independent managers of a manager-managed company appointed by a majority vote of independent managing members or managers, as applicable, present at a meeting of the managing members of a member-managed company or of managers of a manager-managed company, whether or not such independent managing members or managers, as applicable, constitute a quorum; or
(c) A panel of one or more independent persons appointed by the court upon motion by the limited liability company.
(4) A proceeding commenced under this section may not be discontinued or settled without the court’s approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interest of the limited liability company’s members or a class, series, or voting group of members, the court shall direct that notice be given to the members affected. The court may determine which party or parties to the proceeding shall bear the expense of giving the notice.
(5) On termination of the proceeding, the court may require the plaintiff to pay any defendant’s reasonable expenses, including reasonable attorney’s fees, incurred in defending the proceeding if it finds that the proceeding was commenced without reasonable cause.
(6) The court may award reasonable expenses for maintaining the proceeding, including reasonable attorney’s fees, to a successful plaintiff or to the person commencing the proceeding who receives any relief, whether by judgment, compromise, or settlement, and require that the person account for the remainder of any proceeds to the limited liability company; however, this subsection does not apply to any relief rendered for the benefit of injured members only and limited to a recovery of the loss or damage of the injured members.
(7) For purposes of this section, “member” includes a beneficial owner whose limited liability company interests are held in a voting trust or held by a nominee on the member’s behalf.
History. s. 1, ch. 99-315.