Stockholder Rights 03: Stockholder Lawsuits: Direct v Derivative

Stockholders can enforce their rights through "direct" or "derivative" litigation, depending on the nature of the right that is impinged. This module begins by discussing the academic debate on whether stockholders' ability to sue is good or bad for corporations, society, and stockholders. It then explains the difference between direct and derivative rights, and it concludes with a brief overview of the procedural differences between direct and derivative suits. This sets students up for the next module or derivative lawsuits and the demand requirement.

[rayzortheczar]

Hello Seth,
I have watched your videos on Derivative suits and had a question. A company would be considered a nominal defendant in the Derivative. Being that the Company really has done no wrong...if found in default, for say lack of representation, could the Company be held liable to any punishments or adverse judgements? Also considering if the DerivativePlaintiff is unclear on any relief specifically sought against the Company?
Please any insight would be invaluable.
Humbly,
- Raymond F.