(a) Whenever any corporation or any unincorporated association fails to enforce a right which may properly be asserted by it, a derivative action may be brought by one or more shareholders or members to enforce the right, provided the shareholder or member was a shareholder or member at the time of the transaction of which he complained or his membership thereafter devolved on him by operation of law. The action shall be commenced by a complaint returnable to the superior court for the judicial district in which an office of the corporation or association is located. The derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of the shareholders or members similarly situated in enforcing the right of the corporation or association. The action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to shareholders or members in such manner as the court directs.
(b) In any action brought pursuant to this section, process shall be served on the corporation or association as in other civil actions, and notice of the service of process after its having been served shall be given to the board of directors and such other interested persons as the court deems proper. It shall not be necessary to make shareholders or members parties thereto. The costs of the action or part thereof, which shall include but not be limited to witness' fees, court costs and reasonable attorney's fees, may be charged by the court, in its discretion, against the corporation.
(P.A. 77-310; P.A. 82-160, S. 41; 82-472, S. 143, 183.)
History: P.A. 82-160 rephrased the section; P.A. 82-472 deleted obsolete reference to counties.
See Sec. 33-720 et seq. re derivative proceedings.
Cited. 238 C. 183.
Cited. 17 CA 70. Defendant who is no longer shareholder in corporation cannot maintain derivative action on its behalf. 104 CA 810.
Cited. 39 CS 264; 40 CS 327.
Notes of Decisions
Cited in
11
cases, 1981–2019 · leading case:
Fink v. Golenbock, 680 A.2d 1243 (Conn. 1996).
Fink v. Golenbock, 680 A.2d 1243 (Conn. 1996).
· cites it 9× “11 He argues that: (1) a derivative action by the plaintiff on behalf of the corporation was inappropriate, because the claimed injuries could only have been the subject of an action by the plaintiff personally, and the plaintiff did not fairly and adequately represent the…”
Ostrowski v. Avery, 703 A.2d 117 (Conn. 1997).
· cites it 4× “(Avery Abrasives), a manufacturer of abrasive cutting wheels, brought this action in their individual capacities and derivatively on behalf of that corporation pursuant to General Statutes § 52-572j. 1 On the motion of its special litigation committee, 2 Avery Abrasives became a…”
Camp v. Chase, 476 A.2d 1087 (Conn. Super. Ct. 1983).
· cites it 6× “This is a shareholders’ derivative action brought in thirteen counts, pursuant to General Statutes § 52-572j, against various officers and directors of Connecticut Banc Federation, Inc.”
Landry v. Spitz, 925 A.2d 334 (Conn. App. Ct. 2007).
· cites it 2× “2 See General Statutes § 52-572j. 3 Pursuant to General Statutes § 52-57%j (a), a shareholders’ derivative action “shall not be dismissed or compromised without the approval of the court 4 Specifically, he “received payments in 1998 (for 1997), 1999 (for 1998), 2000 (for 1999),…”
Saunders v. Briner, 221 A.3d 1 (Conn. 2019).
· cites it 3× “Not only did our legislature decline to provide for a derivative cause of action in the CLLCA but, when it enacted the CLLCA, it also did not modify our derivative action statute, General Statutes § 52-572j, to include limited liability companies. See Ward v. Gamble, Docket No.…”
Joy v. North, 519 F. Supp. 1312 (D. Conn. 1981).
· cites it 4× “Second, plaintiff contends that the right conferred on a shareholder to initiate a lawsuit under the state derivative suit statute, C.G.S. § 52-572j, necessarily confers an absolute right to maintain the action undisturbed by directors in the exercise of their business judgment.”
Beckworth ex rel. Disc. Trophy & Co. v. Bizier, 138 F. Supp. 3d 144 (D. Conn. 2015).
· cites it 3× “Also, “it is important to note that Connecticut’s statute on derivative actions, § 52-572j, is silent with respect to the applicability -of derivative actions to [limited liability companies]” and "the Connecticut Limited Liability Company Act [ Conn.”
Camp v. Union Mfg. Co., 549 A.2d 285 (Conn. App. Ct. 1988).
· cites it 3× “The settlement went to the trial court for approval, as required by General Statutes § 52-572j, and, after a lengthy examination of the settlement by the court, it was approved.”
Gershman v. Kiam, 498 A.2d 512 (Conn. Super. Ct. 1985).
“This is a shareholders’ derivative action filed on November 29, 1984, on behalf of the Wells Benrus Corporation pursuant to General Statutes *328 § 52-572j. The defendants, who are sued in their individual capacities, are officers and directors or former officers and directors…”
Saunders v. Briner, No. SC19940 and (Conn. Dec. 17, 2019).
· cites it 2× “I note that the legislature has specifically recognized this distinction in the new Connecticut Uniform Limited Liability Company Act, which provides LLC members with the right to bring a direct action but requires the pleading and proof of ‘‘an actual or threatened injury that…”
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