BUSINESS CORPORATION ACT
Act 284 of 1972
450.1492a Commencement of derivative proceeding by shareholder; criteria.
Sec. 492a.
A shareholder may not commence or maintain a derivative proceeding unless the shareholder meets all of the following criteria:
(a) The shareholder was a shareholder of the corporation at the time of the act or omission complained of or became a shareholder through transfer by operation of law from one who was a shareholder at that time.
(b) The shareholder fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.
(c) The shareholder continues to be a shareholder until the time of judgment, unless the failure to continue to be a shareholder is the result of corporate action in which the former shareholder did not acquiesce and the derivative proceeding was commenced prior to the termination of the former shareholder's status as a shareholder.
History: Add. 1989, Act 121, Eff. Oct. 1, 1989 ;-- Am. 1993, Act 91, Eff. Oct. 1, 1993
Notes of Decisions
Baks v. Moroun, 576 N.W.2d 413 (Mich. Ct. App. 1998).
“Last, the parties in §§ 489 and 541a suits arrive in different procedural postures.”
Meathe v. Ret, 903 F. Supp. 2d 507 (E.D. Mich. 2012).
· cites it 2× “Meathe’s complaint is phrased by him as follows: Count I Shareholder Derivative Action MCL § 450.1492a Count II Breach of Non-Compete Agreement (Defendant Ret) Count III Interference with Contracts By Defendants Eaton, Sakwa, G/SH & GLTH Count IV Concert of Action/Civil…”
Simon Prop. Grp., Inc. v. Taubman Centers, Inc., 261 F. Supp. 2d 919 (E.D. Mich. 2003).
· cites it 2× “MCL 450.1492a. Additionally, before filing a derivative action, a written demand must have been served upon the corporation, 90 days prior to filing, demanding that action be taken.”
Peter Karmanos Jr v. Gurminder S Bedi (Mich. Ct. App. 2018).
· cites it 4× “1493a Because we conclude that the alleged injuries in this case are derivative in nature, we next inquire whether plaintiffs have standing to bring these derivative claims. The trial court determined that plaintiffs did not have standing, reasoning that Karmanos was not a…”
Leslie J Murphy v. Samuel M Inman III (Mich. 2022).
· cites it 2× “63 Absent a clear legislative intent, we will not presume that the Legislature, in enacting the BCA, exercised its authority to abrogate those common-law duties.”
20231130_C363655_39_363655.Opn.Pdf (Mich. Ct. App. 2023).
· cites it 2× “Because the Court finds that Plaintiffs claims are derivative, Plaintiffs were required to comply with the statutory requirements of MCL 450.1492a and MCL 450.1493a. Plaintiffs do not allege that they have met those requirements.”
Huron City Co. v. Charles Abram Parcells III (Mich. Ct. App. 2018).
“201(C) (stating that “[a]n action must be prosecuted in the name of the real party in interest”) Pursuant to MCL 450.1492a, for a shareholder to be eligible to commence a derivative proceeding, the shareholder must satisfy the following criteria: A shareholder may not commence…”
Huron City Co. v. Charles Abram Parcells III (Mich. Ct. App. 2018).
“201(C) (stating that “[a]n action must be prosecuted in the name of the real party in interest”) Pursuant to MCL 450.1492a, for a shareholder to be eligible to commence a derivative proceeding, the shareholder must satisfy the following criteria: A shareholder may not commence…”
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