kaal:claim:3017612-015

Corporate claims frequently go unpursued because the decision to sue rests with directors who are often the wrongdoers themselves, which is why shareholders resort to derivative actions.

Source quote, verbatim

When the corporation is harmed, it is the corporation that has the claim, but directors are often unwilling to pursue claims, especially when they are the wrongdoers.

From

Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017), III.1 Shareholders' Agreements on Shareholder Rights, p. 8
https://ssrn.com/abstract=3017612 · source PDF

Cite as

Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612

Holds when

injury is to the corporation rather than to shareholders individually

Classification

mechanismsupport: evidencedfailure: director-self-interest-blocks-corporate-claimsfamily: agency-cost-and-managerial-opportunismcompliancecorporate-governance

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