2006) ("Limited partners seeking redress for the decreased value of their shares in the limited partnership must do so in a derivative action."). If the injury is not incidental to an injury to the corporation, an individual cause of action exists."); , Del. 17436 ("The distinction between a direct and derivative claim, which is difficult to apply in specific circumstances, turns on the existence of direct or 'special' injury to the plaintiff stockholder."); , 403 F. Potter serves as the Co-Chair of the Firm's White Collar and Corporate Investigations Practice Group and has extensive criminal defense experience. The Attorney General of the United States personally presented Mr.He previously served as Co-Chair of the American Bar Association's White Collar Committee for the Northern District of California and as the National Co-Chair of the ABA's Criminal Antitrust Committee. Potter has conducted numerous internal investigations at the request of corporations, boards of directors, audit committees and special committees. Potter has also represented corporations, directors and officers in a wide array of civil matters including healthcare litigation, derivative suits, securities litigation, 17200/17500 claims and false claims actions, as well as unfair competition, libel, breach of contract and employment cases. Potter with a Director's Award for his successful prosecution of an United States Congressman. Potter also received a Department of Justice commendation for the successful civil rights prosecution of the Los Angeles Police Officers involved in the Rodney King beating.Thus, 'the action is derivative, i.e., in the corporate right, if the gravamen of the complaint is injury to the corporation, or to the whole body of its stock or property without any severance or distribution among individual holders, or if it seeks to recover assets for the corporation or to prevent the dissipation of its assets."). An action is derivative when brought by a shareholder on behalf of the corporation for harm suffered by all shareholders in common. 1991) ("A shareholder derivative suit is a uniquely equitable remedy in which a shareholder asserts on behalf of a corporation a claim belonging not to the shareholder, but to the corporation."); , 699 F. 1983) ("When an officer, director, or controlling shareholder breaches [a] fiduciary duty to the corporation, the shareholder has no 'standing to bring [a] civil action at law against faithless directors and managers,' because the corporation and not the shareholder suffers the injury[; e]quity, however, allow[s] him to step into the corporation's shoes and to seek in its right the restitution he could not demand on his own."); 1996 WL 66006, at *4 (Del. Corporate waste claims are derivative, not individual."). Condominium unit owners are, therefore, entitled to the same consideration by the courts as the litigants in those situations in which the courts have historically allowed derivative actions to proceed, independent of any statutory authority." , 323 B. (1) "Although most derivative suits involve claims by a shareholder on behalf of a corporation, derivative suits also may be filed by members of an unincorporated association, such as a limited partnership." , 2004 WL 2944055, at *2 (N.
Potter as a "high powered trial lawyer," an "A-List" defense counsel, and “the best in the business.” Mr. Potter taught trial advocacy to federal prosecutors as part of the Attorney General's Trial Institute Program. Potter has delivered lectures and provided training throughout the world to the American Bar Association, the California State Bar and various international organizations, on a variety of topics including internal investigations, the Foreign Corrupt Practices Act, Health Care Fraud, the False Claims Act, Securities Fraud and the Economic Espionage Act. Potter previously held a number of high-ranking positions within the United States Attorney's Office, where he received professional commendations from the Department of Justice, the Federal Bureau of Investigation, the Internal Revenue Service, the Department of Defense and the United States Customs Service.
27, 2004) ("If the injury is one to the plaintiff as an individual shareholder, as where the action is based on a contract to which the shareholder is a party, or on a right belonging severally to the shareholder, or on a fraud affecting the shareholder directly, or if there is a duty owed to the individual independent of the person's status as a shareholder, the shareholder may assert a direct action on his own behalf."); , 395 F.3d 773, 777 (7th Cir. 1959) ("[T]he line of distinction between derivative suits and those brought for the enforcement of personal rights asserted on behalf of a class of stockholders is often a narrow one, the latter type of actions being designed to enforce common rights running against plaintiffs' own corporation or those dominating it, while the former are clearly for the purpose of remedying wrongs to the corporation itself"). [But, that] standing alone, is not a reason to dismiss [a] plaintiff''s lawsuit. 29, 2005) ("[When a] board of directors authorizes the issuance of stock for no or grossly inadequate consideration, the corporation is directly injured and shareholders are injured derivatively . The Court went on to explain that there is "a species of corporate overpayment . A breach of fiduciary duty claim having this dual character arises where: (1) a stockholder having majority or effective control causes the corporation to issue 'excessive' shares of its stock in exchange for assets of the controlling stockholder that have a lesser value; and (2) the exchange causes an increase in the percentage of the outstanding shares owned by the controlling stockholder, and a corresponding decrease in the share percentage owned by the public (minority) shareholders. However, the "public (or minority) stockholders also have a separate, and direct, claim arising out of that same transaction .
A derivative action is actually two causes of action: it is an action to compel the corporation to sue and it is an action brought by a shareholder on behalf of the corporation to redress harm to the corporation. Second, it is a suit by the corporation, asserted by the shareholders on its behalf, against those liable to it."); , 532 N. 1988) (a derivative action is in effect two actions: "one against the directors for failing to sue; the second based upon the right belonging to the corporation."). A derivative action allows shareholders to monitor and redress harm to the corporation caused by management where it is unlikely that management will redress the harm itself. 3d 93 (1969) ("A shareholder's derivative suit seeks to recover for the benefit of the corporation and its whole body of shareholders when injury is caused to the corporation that may not otherwise be redressed because of failure of the corporation to act. 5, 1996) ("A proven claim of mismanagement resulting in corporate waste is a direct wrong to the corporation, and all stockholders experience an indirect wrong. 15, 2004) (plaintiff invested in venture capital funds, then alleged damages in the millions as a result of the defendants' fraudulent and negligent misrepresentation, breach of contract, breach of fiduciary duty, etc.; court held that most of the plaintiff's claims were derivative and had to be brought on behalf of the funds, of which plaintiff was a limited partner); , 845 N. All are owners of fractional interests in a common entity run by managers who owe them a fiduciary duty that requires protection.
First, it is the equivalent of a suit by the shareholders to compel the corporation to sue. 161, 167 (1946) ("[T]he purpose of the derivative action [is] to place in the hands of the individual shareholder a means to protect the interest of the corporation from the misfeasance and malfeasance of 'faithless directors and mangers'" (quoting , 1 Cal. (2) "The same factors that caused the courts to fashion the derivative action procedure for shareholders and limited partners thus apply to condominium unit owners.
John Potter is a nationally renowned trial lawyer with a practice focused on civil litigation and white collar criminal defense. Potter has been repeatedly recognized as one of the best lawyers in the United States by Chambers, USA, The International Who's Who of Business Lawyers, The Legal 500, The Expert's Guide to the World's Leading Lawyers, and The Best Lawyers in America.The authoritative professional resource, Chambers, USA, has given Mr.