TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

Section 3. Nonprofit Corporations, 14-3-101 through 14-3-1703.

ARTICLE 7 MEETINGS

14-3-744. Dismissal of proceeding.

1. The court may dismiss a derivative proceeding if, on motion by the corporation, the court finds that one of the groups specified in subsection (b) of this Code section 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 corporation.The corporation shall have the burden of proving the independence and good faith of the group making the determination and the reasonableness of the investigation.
2. The determination in subsection (a) of this Code section shall be made by:
   1. A majority vote of independent directors present at a meeting of the board of directors if the independent directors constitute a quorum;
   2. A majority vote of a committee consisting of two or more independent directors appointed by a majority vote of independent directors present at a meeting of the board of directors, whether or not such independent directors constitute a quorum; or
   3. A panel of one or more independent persons appointed by the court upon motion by the corporation.
3. None of the following shall by itself cause a director to be considered not independent for purposes of subsection (b) of this Code section:
   1. The nomination or election of the director by directors who are not independent;
   2. The naming of the director as a defendant in the derivative proceeding; or
   3. The fact that the director approved the action being challenged in the derivative proceeding so long as the director did not receive a personal benefit as a result of the action.

(Code 1981, §14-3-744, enacted by Ga. L. 1991, p. 465, § 1.)