No Shares, No Derivative Suit: Calif. Court

Law360, New York (February 19, 2008, 12:00 AM EST) -- In a decision that could have a major impact on shareholder derivative suits, a California court has ruled that a plaintiff who loses shareholder standing at any point in the litigation also loses the right to bring a derivative action on behalf of a company.

The ruling, handed down on Feb. 14 by the Supreme Court of California, blocked plaintiff Sik-Lin Huang from suing the officers and directors of JNI Corporation in a derivative suit on the grounds that Huang had been forced by a merger...
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