2006 New York Code - Members\' Derivative Action Brought In The Right Of The Corporation To Procure A Judgment In Its Favor

 
  § 623. Members'   derivative   action   brought  in  the  right  of  the
           corporation to procure a judgment in its favor.
    (a) An action may be brought in the right of  a  domestic  or  foreign
  corporation  to  procure a judgment in its favor by five percent or more
  of any class of members or by such percentage of the holders of  capital
  certificates  or  of  the owners of a beneficial interest in the capital
  certificates of such corporation.
    (b) In any such action, it shall be made to appear that each plaintiff
  is such a member, holder or owner at the time of bringing the action.
    (c)  In  any  such  action,  the  complaint  shall  set   forth   with
  particularity  the  efforts of the plaintiff or plaintiffs to secure the
  initiation of such action by the board of the reason for not making such
  effort.
    (d) Such action shall not  be  discontinued,  compromised  or  settled
  without the approval of the court having jurisdiction of the action.  If
  the  court  shall  determine that the interests of the members or of any
  class  or  classes  thereof  will  be  substantially  affected  by  such
  discontinuance,  compromise or settlement, the court, in its discretion,
  may direct that notice, by publication or otherwise, shall be  given  to
  the  members  or  class or classes thereof whose interests it determines
  will be so affected; if notice is so directed to be given, the court may
  determine which one or more of the parties to the action shall bear  the
  expense  of giving the same, in such amount as the court shall determine
  and find to be reasonable in the circumstances, and the amount  of  such
  expense  shall be awarded as special costs of the action and recoverable
  in the same manner as statutory taxable costs.
    (e) If the action on behalf of  the  corporation  was  successful,  in
  whole  or  in  part,  or  if  anything  was received by the plaintiff or
  plaintiffs or a claimant or claimants  as  the  result  of  a  judgment,
  compromise  or settlement of an action or claim, the court may award the
  plaintiff or plaintiffs, claimant  or  claimants,  reasonable  expenses,
  including  reasonable  attorney's  fees, and shall direct him or them to
  account to the corporation for the remainder of the proceeds so received
  by him or them. This paragraph shall not apply to any judgment  rendered
  for the benefit of injured members or non-record owners only and limited
  to a recovery of the loss or damage sustained by them.