Trade Nivesh Derivative Equity

In derivative actions the plaintiff must first demand that the directors of the corporation pursue the claims on the corporation’s behalf. That requirement makes sense because the claims belong to the corporation and corporate management is best positioned to protect the corporation’s interests. However, the requirement of a pre-suit demand to the corporate board is illogical when the plaintiff seeks, on behalf of the corporation, to pursue claims that arise from illegal or unfair conduct of corporate management itself. In that scenario the corporate hen house is being guarded by foxes in management; foxes who are unlikely to pursue claims based upon their own misdeeds.