Va. Code » Title 13.1. Corporations » Chapter 9. Virginia Stock Corporation Act » Article 8.1. Derivative Proceedings and Other Shareholder Actions
Virginia Code

Va. Code Ann. § 13.1-672.5 (2026)

Payment of and security for expenses

✓ current as of May 2026
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On termination of a derivative proceeding, the court may:

1. Order the corporation to pay the plaintiff's expenses incurred in the proceeding if it finds that the derivative proceeding has resulted in a substantial benefit to the corporation; or

2. Order the plaintiff or the plaintiff's attorney to pay the corporation's or any defendant's expenses incurred in responding to the demand or defending the derivative proceeding if it finds that the demand was made or the derivative proceeding was commenced or maintained arbitrarily, vexatiously, or not in good faith.

1992, c. 802; 1993, c. 233; 2019, c. 734; 2026, cc. 383, 892.

Notes of Decisions
Cited in 6 cases (1 in the last 5 years), 1998–2023 · leading case: Parsch v. Massey, 79 Va. Cir. 446 (Charlottesville Cir. Ct. 2009).
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Parsch v. Massey, 79 Va. Cir. 446 (Charlottesville Cir. Ct. 2009). · cites it 21× “) In Count IV of the Counterclaim, the Counterclaim Plaintiffs claimed indemnification under Va. Code § 13.1-672.5 for expenses incurred in defending the litigation.”
Cattano v. Bragg, 727 S.E.2d 625 (Va. 2012). · cites it 6× “Finally, Cattano argued that Bragg was not entitled to recover fees under the derivative claim of conversion (Count III) because she had rendered no substantial benefit to the corporation as required by Code § 13.1-672.5(1). In its final judgment order, however, the circuit…”
Monroe v. Monroe (Va. 2023). · cites it 16× “After the hearing, in an order dated August 31, 2021, the trial court granted the motion for sanctions pursuant to Code § 13.1-672.5 and ordered Joseph Monroe to pay $70,097.”
Parsch v. Massey, 71 Va. Cir. 209 (Charlottesville Cir. Ct. 2006). · cites it 3× “1), and (4) Demand for Indemnification by all Defendants (Va. Code § 13.1-672.5). (Counterclaim for Massey et al.”
Mardula v. Shamshiry, Inc., 49 Va. Cir. 55 (Fairfax Cir. Ct. 1999). · cites it 3× “Once these counts are specified, Plaintiff can also properly allege foe counts upon which he bases foe prayer for attorney’s fees under Virginia Code § 13.1-672.5. The Demurrer is sustained on this issue with leave to amend within twenty-one days from the date of this letter, or…”
Willard ex rel. Moneta Bldg. Supply, Inc. v. Moneta Bldg. Supply, Inc., 50 Va. Cir. 558 (Bedford Cir. Ct. 1998). · cites it 2× “Upon my application of § 13.1-672.5(1) of the Code of Virginia to the facts as I have determined them, I do not find that this proceeding has resulted in substantial benefit to the corporation.”
Va. Code Ann. § 13.1-672.5(1): 2 cases
Cattano v. Bragg, 727 S.E.2d 625 (Va. 2012). “Finally, Cattano argued that Bragg was not entitled to recover fees under the derivative claim of conversion (Count III) because she had rendered no substantial benefit to the corporation as required by Code § 13.1-672.5(1). In its final judgment order, however, the circuit…”
Willard ex rel. Moneta Bldg. Supply, Inc. v. Moneta Bldg. Supply, Inc., 50 Va. Cir. 558 (Bedford Cir. Ct. 1998). “Upon my application of § 13.1-672.5(1) of the Code of Virginia to the facts as I have determined them, I do not find that this proceeding has resulted in substantial benefit to the corporation.”
Va. Code Ann. § 13.1-672.5(2): 3 cases
Parsch v. Massey, 79 Va. Cir. 446 (Charlottesville Cir. Ct. 2009). “) In Count IV of the Counterclaim, the Counterclaim Plaintiffs claimed indemnification under Va. Code § 13.1-672.5 for expenses incurred in defending the litigation.”
Monroe v. Monroe (Va. 2023). “After the hearing, in an order dated August 31, 2021, the trial court granted the motion for sanctions pursuant to Code § 13.1-672.5 and ordered Joseph Monroe to pay $70,097.”
Willard ex rel. Moneta Bldg. Supply, Inc. v. Moneta Bldg. Supply, Inc., 50 Va. Cir. 558 (Bedford Cir. Ct. 1998). “Upon my application of § 13.1-672.5(1) of the Code of Virginia to the facts as I have determined them, I do not find that this proceeding has resulted in substantial benefit to the corporation.”
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