by Jenness E. Parker and Elisa M. Klein
Takeaways
- Corporations can face a wave of stockholder actions purporting to enforce the corporations’ own legal rights, from books and records requests to derivative suits and litigation demands.
- In contrast to class actions, there are few established procedures for resolving these disputes in a centralized forum, so companies often find themselves responding to many similar demands and suits, sometimes in multiple jurisdictions.
- Stockholder actions can be both expensive and distracting for companies to address, even though they are intended to benefit the company.
- Companies can impose some order by requiring all derivative suits to be filed in one jurisdiction and by responding uniformly to all books and records demands.