BUSINESS CORPORATION ACT
Act 284 of 1972
450.1495 Dismissal of derivative proceeding; determination.
Sec. 495.
(1) The court shall dismiss a derivative proceeding if, on motion by the corporation, the court finds that 1 of the groups specified in subsection (2) has made a determination in good faith after conducting a reasonable investigation upon which its conclusions are based that the maintenance of the derivative proceeding is not in the best interests of the corporation. If the determination is made pursuant to subsection (2)(a) or (b), the corporation shall have the burden of proving the good faith of the group making the determination and the reasonableness of the investigation. If the determination is made pursuant to subsection (2)(c) or (d), the plaintiff shall have the burden of proving that the determination was not made in good faith or that the investigation was not reasonable.
(2) A determination under subsection (1) may be made by any 1 of the following:
(a) By a majority vote of the disinterested directors, if the disinterested directors constitute a quorum at a meeting of the board.
(b) By a majority vote of a committee consisting of 2 or more disinterested directors appointed by a majority vote of disinterested directors present at a meeting of the board, whether or not the disinterested directors constitute a quorum at the meeting.
(c) By a panel of 1 or more disinterested persons appointed by the court upon motion by the corporation.
(d) By all disinterested independent directors.
History: Add. 1989, Act 121, Eff. Oct. 1, 1989
Notes of Decisions
Picard Chem. Inc. Profit Sharing Plan v. Perrigo Co., 951 F. Supp. 679 (W.D. Mich. 1996).
· cites it 5× “In its motion, Perrigo asserted that because Formanek, as the sole independent disinterested director, had conducted a reasonable investigation in good faith and determined that pursuing a lawsuit was not in Perrigo’s best interests, Perrigo was insulated from liability pursuant…”
In Re Perrigo Co., 128 F.3d 430 (6th Cir. 1997).
· cites it 2× “See Mich. Comp. Laws Ann. § 450.1495 (West 1990).”
Kearney v. Jandernoa, 934 F. Supp. 863 (W.D. Mich. 1996).
· cites it 4× “§ 450.1495. This provision states, in part, as follows: (1) The court shall dismiss a derivative proceeding if, on motion by the corporation, the court finds that 1 of the groups specified in subsection (2) has made a determination in good faith after conducting a reasonable…”
Frank Kern III v. Bonnie Kern-Koskela (Mich. Ct. App. 2017).
· cites it 20× “Thereafter, Maxitrol moved for the appointment of a “disinterested person” pursuant to MCL 450.1495 to investigate whether the continuation of plaintiff’s derivative suit was in the best interests of the corporation.”
In Re Rospatch Sec. Litig., 760 F. Supp. 1239 (W.D. Mich. 1991).
“§ 450.1495, Professor Joel Seligman was appointed on March 1, 1991, as a disinterested person to investigate the derivative lawsuit.”
Sherry v. Chioini, 219 F. Supp. 3d 608 (E.D. Mich. 2016).
· cites it 7× “§ 450.1495 (“Section 495”). In relevant part, Section 495 provides that when a corporation receives a shareholder demand letter, it may file a motion asking a court to appoint a “panel of [one] or more disinterested persons” to investigate the claims asserted in the demand…”
Atlantis Grp., Inc. v. Rospatch Corp., 760 F. Supp. 1239 (W.D. Mich. 1991).
“§ 450.1495, Professor Joel Seligman was appointed on March 1, 1991, as a disinterested person to investigate the derivative lawsuit.”
Kearney v. Jandernoa, 979 F. Supp. 1156 (W.D. Mich. 1997).
“§ 450.1495(1) and (2). This Court, however, has made it clear that Plaintiffs would be unable to present facts essential to justify their opposition to Perrigo’s motions unless they had access to' the Formanek Report.”
— Mich. Comp. Laws § 450.1495(1) — 3 cases
Kearney v. Jandernoa, 934 F. Supp. 863 (W.D. Mich. 1996).
“§ 450.1495. This provision states, in part, as follows: (1) The court shall dismiss a derivative proceeding if, on motion by the corporation, the court finds that 1 of the groups specified in subsection (2) has made a determination in good faith after conducting a reasonable…”
Sherry v. Chioini, 219 F. Supp. 3d 608 (E.D. Mich. 2016).
“§ 450.1495 (“Section 495”). In relevant part, Section 495 provides that when a corporation receives a shareholder demand letter, it may file a motion asking a court to appoint a “panel of [one] or more disinterested persons” to investigate the claims asserted in the demand…”
Kearney v. Jandernoa, 979 F. Supp. 1156 (W.D. Mich. 1997).
“§ 450.1495(1) and (2). This Court, however, has made it clear that Plaintiffs would be unable to present facts essential to justify their opposition to Perrigo’s motions unless they had access to' the Formanek Report.”
— Mich. Comp. Laws § 450.1495(2)(c) — 1 case
Sherry v. Chioini, 219 F. Supp. 3d 608 (E.D. Mich. 2016).
“§ 450.1495 (“Section 495”). In relevant part, Section 495 provides that when a corporation receives a shareholder demand letter, it may file a motion asking a court to appoint a “panel of [one] or more disinterested persons” to investigate the claims asserted in the demand…”
— Mich. Comp. Laws § 450.1495(2)(d) — 1 case
Kearney v. Jandernoa, 934 F. Supp. 863 (W.D. Mich. 1996).
“§ 450.1495. This provision states, in part, as follows: (1) The court shall dismiss a derivative proceeding if, on motion by the corporation, the court finds that 1 of the groups specified in subsection (2) has made a determination in good faith after conducting a reasonable…”
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