Delaware – Limited Liability Company Act – Derivative Actions


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§ 18-1001. | § 18-1002. |
§ 18-1003. |
§ 18-1004.

Commerce and Trade

SUBTITLE II

Other Laws Relating to Commerce and Trade

CHAPTER 18. LIMITED LIABILITY COMPANY ACT

Subchapter X. Derivative Actions

§ 18-1001. Right to bring action.

A member or an assignee of a limited
liability company interest may bring an action in the Court of Chancery
in the right of a limited liability company to recover a judgment in
its favor if managers or members with authority to do so have refused
to bring the action or if an effort to cause those managers or members
to bring the action is not likely to succeed. (68 Del. Laws, c. 434, §
1; 71 Del. Laws, c. 341, § 16.)

§ 18-1002. Proper plaintiff.

In a derivative action, the plaintiff
must be a member or an assignee of a limited liability company interest
at the time of bringing the action and:

(1) At the time of the transaction of which the plaintiff complains; or

(2) The plaintiff’s status as a member or
an assignee of a limited liability company interest had devolved upon
the plaintiff by operation of law or pursuant to the terms of a limited
liability company agreement from a person who was a member or an
assignee of a limited liability company interest at the time of the
transaction. (68 Del. Laws, c. 434, § 1; 70 Del. Laws, c. 186, § 1; 71
Del. Laws, c. 341, § 17.)

§ 18-1003. Complaint.

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 a manager or member or the
reasons for not making the effort. (68 Del. Laws, c. 434, § 1.)

§ 18-1004. Expenses.

If a derivative action is successful, in
whole or in part, as a result of a judgment, compromise or settlement
of any such action, the court may award the plaintiff reasonable
expenses, including reasonable attorney’s fees, from any recovery in
any such action or from a limited liability company. (68 Del. Laws, c.
434, § 1.)

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