2006 Code of Virginia § 13.1-672.1 - Standing; condition precedent; stay of proceedings

13.1-672.1. Standing; condition precedent; stay of proceedings.

A. A shareholder may not commence or maintain a derivative proceeding unlessthe shareholder:

1. Was a shareholder of the corporation at the time of the act or omissioncomplained of;

2. Became a shareholder through transfer by operation of law from one who wasa shareholder at that time; or

3. Became a shareholder before public disclosure and without knowledge of theact or omission complained of; and

4. Fairly and adequately represents the interests of the corporation inenforcing the right of the corporation.

B. No shareholder may commence a derivative proceeding until:

1. A written demand has been made on the corporation to take suitable action;and

2. Ninety days have expired from the date demand was made unless (i) theshareholder has been notified before the expiration of ninety days that thedemand has been rejected by the corporation or (ii) irreparable injury to thecorporation would result by waiting until the end of the ninety-day period.

C. If the corporation commences a review and evaluation of the allegationsmade in the demand or complaint, the court may stay any derivative proceedingfor such period as the court deems appropriate.

(1992, c. 802.)