490A.1001 - RIGHT OF MEMBER TO BRING DERIVATIVE ACTION.
490A.1001 RIGHT OF MEMBER TO BRING DERIVATIVE ACTION. A member may bring an action in the right of the limited liability company to recover a judgment in its favor if all of the following conditions are met: 1. Either management of the limited liability company is vested in a manager or managers who have the sole authority to cause the limited liability company to sue in its own right or management of the limited liability company is reserved to the members but the plaintiff does not have the authority to cause the limited liability company to sue in its own right under the provisions of the articles of organization or an operating agreement. 2. The plaintiff has made demand on those managers or those members with such authority requesting that such managers or such members cause the limited liability company to sue in its own right. 3. The members or managers with such authority have wrongfully refused to bring the action or, after adequate time to consider the demand, have failed to respond to the demand. 4. The plaintiff is a member of the limited liability company at the time of bringing the action and was a member of the limited liability company at the time of the transaction of which the plaintiff complains, or the plaintiff's status as a member of the limited liability company thereafter devolved upon the plaintiff pursuant to the terms of the articles of organization or an operating agreement from a person who was a member at such time. 5. The plaintiff fairly and adequately represents the interests of the members in enforcing the right of the limited liability company.
Section History: Recent Form 92 Acts, ch 1151, § 57