2011 Code of Virginia
Title 13.1 CORPORATIONS.
Chapter 9 Virginia Stock Corporation Act (13.1-601 thru 13.1-792)
13.1-672.4 Dismissal
13.1-672.4. Dismissal.
A. A derivative proceeding shall be dismissed by the court on motion by the corporation if one of the groups specified in subsection B or E has:
1. Conducted a review and evaluation, adequately informed in the circumstances, of the allegations made in the demand or complaint;
2. Determined in good faith on the basis of that review and evaluation that the maintenance of the derivative proceeding is not in the best interests of the corporation; and
3. Submitted in support of the motion a short and concise statement of the reasons for its determination.
B. Unless a panel is appointed pursuant to subsection E, the determination in subsection A shall be made by:
1. A majority vote of disinterested directors present at a meeting of the board of directors if the disinterested directors constitute a quorum; or
2. A majority vote of a committee consisting of two or more disinterested directors appointed by a majority vote of disinterested directors present at a meeting of the board of directors, whether or not such disinterested directors constituted a quorum.
C. If a derivative proceeding has been commenced after a determination has been made rejecting a demand by a shareholder, the complaint shall allege with particularity facts establishing that the requirements of subsection A have not been met. The plaintiff shall be entitled to discovery with respect to the issues presented by the motion only if and to the extent that the complaint alleges such facts with particularity.
D. The plaintiff shall have the burden of proving that the requirements of subsection A have not been met, except that the corporation shall have the burden with respect to the issue of independence under subsection B if the complaint alleges with particularity facts raising a substantial question as to such independence.
E. The court may appoint a panel of independent persons upon motion by the corporation to make a determination whether the maintenance of the derivative proceeding is in the best interests of the corporation.
(1992, c. 802; 1993, c. 233; 2005, c. 765.)
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