Derivative and Direct Actions Sample Clauses
The "Derivative and Direct Actions" clause defines the rights and procedures for parties to bring legal claims either on their own behalf (direct actions) or on behalf of the company or group (derivative actions). In practice, this clause clarifies under what circumstances a shareholder or stakeholder may initiate a lawsuit to address wrongs done to the company, such as breaches of fiduciary duty by directors, versus when they may sue for personal harm. Its core function is to delineate the boundaries between individual and collective legal remedies, thereby preventing duplicative or inappropriate lawsuits and ensuring that claims are brought by the proper parties.
Derivative and Direct Actions. (a) Subject to the Delaware Act, no Shareholder may bring a derivative or similar action or proceeding in the right of the Trust or any Series to recover a judgment in its favor (a "derivative action") unless each of the following conditions is met:
(i) Each Complaining Shareholder was a Shareholder of (A) the Series on behalf of or in the right of which the action is proposed to be brought and (B) a Class of the Series affected by the action or failure to act complained of, to the extent that fewer than all Classes were affected (the "affected Series or Class"), at the time of the action or failure to act complained of, or acquired the Shares afterwards by operation of law from a Person who was a Shareholder at that time;
(ii) Each Complaining Shareholder was a Shareholder of the affected Series or Class at the time the demand required by subparagraph (iii) below was made;
(iii) Prior to the commencement of such derivative action, the Complaining Shareholders have made a written demand on the Trustees requesting that the Trustees cause the Trust to file the action itself on behalf of the affected Series or Class (a "demand"), which demand (A) shall be executed by or on behalf of no less than three Complaining Shareholders, each of which shall be unaffiliated and unrelated (by blood or by marriage) to any other Complaining Shareholder executing such written demand and (B) shall include at least the following:
(1) a detailed description of the action or failure to act complained of, the facts upon which each such allegation is made and the reasonably estimated damages or other relief sought;
(2) a statement to the effect that the Complaining Shareholders believe in good faith that they will fairly and adequately represent the interests of similarly situated Shareholders in enforcing the right of the affected Series or Class and an explanation of why the Complaining Shareholders believe that to be the case;
(3) a certification that the requirements of subparagraphs (i) and (ii) of this paragraph (a) have been met, as well as information reasonably designed to allow the Trustees to verify that certification;
(4) a list of all other derivative or class actions in which any of the Complaining Shareholders is or was a named plaintiff, the court in which such action was filed, the date of filing, the name of all counsel to any plaintiffs and the outcome or current status of such actions;
(5) a certification of the number of Shares of the affected Series or Class ...
Derivative and Direct Actions. In addition to the requirements set forth in Section 3816 of the Delaware Act (or successor provision), to the maximum extent permitted by applicable law, a Shareholder may bring a derivative action on behalf of the Trust or any Series only if the following conditions are met:
(a) The Shareholder or Shareholders must make a pre-suit written demand upon the Trustees to bring the subject action unless an effort to cause the Trustees to bring such an action is not likely to succeed. For purposes of this Section, a demand on the Trustees shall only be deemed not likely to succeed and therefore excused if a majority of the Trustees, or a majority of any committee established to consider the merits of such action, are Trustees who are not “independent trustees” (as that term is defined in the Delaware Act). Such demand shall be executed by or on behalf of no fewer then three complaining Shareholders, each of which shall be unaffiliated and unrelated (by blood or marriage) to any other complaining Shareholder executing such demand. Such demand shall contain a detailed description of the action or failure to act complained of, the facts upon which such allegation is made and the reasonably estimated damages or other relief sought.
(b) Unless a demand is not required under paragraph (a) of this Section, Shareholders eligible to bring such derivative action under the Delaware Act, other than those that are brought under the federal securities laws, who collectively hold Shares representing ten percent (10%) or more of all Outstanding Shares of the Series or Class(es) to which such action relates, if it does not relate to all Series and Classes, shall join in the request for the Trustees to commence such action.
(c) Unless a demand is not required under paragraph (a) of this Section, the Trustees must be afforded a reasonable amount of time to consider such Shareholder request and to investigate the basis of such claim, other than those that are brought under the federal securities laws. For purposes hereof, the Trustees may designate a committee of one Trustee to consider a Shareholder demand, provided that a committee of one Trustee is required to create a committee with a majority of Trustees who are “independent trustees” (as that term is defined in the Delaware Act). The Trustees shall be entitled to retain counsel or other advisors in considering the merits of the request and may require an undertaking by the Shareholders making such request to reimburse the Tr...
Derivative and Direct Actions. In addition to the requirements set forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative action on behalf of the Trust only if the following conditions are met:
(a) Shareholders eligible to bring such derivative action under the Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, or 10% of the Outstanding Shares of the Series or Class to which such action relates, shall join in the request for the Trustees to commence such action.
(b) The Trustees must be afforded a reasonable amount of time to consider such Shareholder request and to investigate the basis of such claim. The Trustees shall be entitled to retain counsel or other advisers in considering the merits of the request and shall require an undertaking by the Shareholders making such request to reimburse the Trust for the expense of any such advisers in the event that the Trustees determine not to bring such action.
(c) No Shareholder may bring a direct action claiming injury as a Shareholder of the Trust where the matters alleged (if true) would give rise to a claim by the Trust, unless the Shareholder has suffered an injury distinct from that suffered by the Trust. A Shareholder bringing a direct claim must be a Shareholder of the Series or Class with respect to which the direct action is brought at the time of the injury complained of, or have acquired the Shares afterwards by operation of law from a person who was a Shareholder at that time.
Derivative and Direct Actions. (a) The purpose of this Section 9.8 is to protect the interests of the Trust and its Shareholders by establishing a process that will permit legitimate inquiries and claims to be made and considered while avoiding the time, expense, distraction, and other harm that can be caused to the Trust and its Shareholders as a result of spurious Shareholder claims, demands, and derivative actions.
Derivative and Direct Actions. (a) This Section is intended to enable bona-fide Shareholder claims while protecting the Trust and its Shareholders from meritless or duplicative litigation.
(b) A Shareholder (together with any co-plaintiffs) must have continuously owned-both at the time of the alleged wrong and throughout the litigation-at least ten percent (10 %) of the Outstanding Shares of each Series or Class that would be affected by the proposed action.
(c) Before filing suit the Shareholder must deliver to the Board a written demand stating with reasonable particularity (i) the alleged breach or wrong, (ii) the relief sought and (iii) the basis for the Shareholder's standing. The Trustees, or a committee of independent Trustees, shall have not less than ninety (90) days to investigate the matter.
(d) If a majority of the independent Trustees, after such investigation, determine in good faith that the requested action is not in the best interests of the Trust or the affected Series or Class, that decision is binding unless the plaintiff proves that the Trustees failed to satisfy the standard of conduct in Article X, Section 2.
(e) A Shareholder may assert a direct claim only for an injury distinct from the injury suffered by Shareholders generally; claims that affect Shareholders proportionally must be brought derivatively under this Section.
(f) If a derivative or direct action is dismissed for failure to comply with this Section, the court may require the plaintiff Shareholder(s) to reimburse the Trust, Series or Class for its reasonable expenses, including attorneys' fees.
Derivative and Direct Actions. (a) Subject to the Delaware Act, no Shareholder may bring a derivative or similar action or proceeding in the right of the Trust or any Class to recover a judgment in its favor (a “derivative action”) unless each of the following conditions is met:
(i) Each Complaining Shareholder, as defined below, was a Shareholder of the Trust or of the Class on behalf of or in the right or name of which the action is proposed to be brought (the “affected Class”), at the time of the action or failure to act complained of, or acquired the Shares afterwards by operation of law from a Person who was a Shareholder at that time;
(ii) Each Complaining Shareholder was a Shareholder of the Trust or the affected Class at the time the demand required by subparagraph (iii) below was made;
(iii) Prior to the commencement of such derivative action, the Complaining Shareholders have made a written demand on the Trustees requesting that the Trustees cause the Trust to file the action itself on behalf of the Trust or the affected Class (a “demand”), which demand (A) shall be executed by or on behalf of no fewer than three Complaining Shareholders, each of which shall be unaffiliated and unrelated (by blood or by marriage) to any other Complaining Shareholder executing such written demand; and (B) shall include at least the following: