# kaal:claim:3017612-017

**Claim.** To escape the procedural hurdles of derivative litigation and recover directly, a shareholder must persuade the court that those abusing control of the corporation harmed the shareholder directly rather than the entity.

**Type.** condition  **Support.** evidenced

**Holds when.**

- direct as opposed to derivative suits
- Delaware courts ask who suffered the harm and who would receive the recovery

**Source quote.**

> To avoid some of the procedural hurdles of derivative litigation and enable direct recovery, shareholders must convince the court that individuals abusing control of the corporation were directly harming the shareholders.

**From.** Wulf A. Kaal, *Shareholder Agreements - National Report of the United States of America* (2017), III.1 Shareholders' Agreements on Shareholder Rights, page 9

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

**Verify.** sha256 of source PDF `33821db406f92efbe1698fbaed37687595c13b7ce5463b4a879df679fd4af1ac` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202017%20-%20Shareholder%20Agreements%20-%20National%20Report%20of%20the%20United%20States%20of%20America.pdf

**Topics.** corporate-governance

**Keywords.** direct-vs-derivative, tooley, procedural-hurdles, minority-shareholders

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