2018 Mississippi Code
Title 79 - Corporations, Associations, and Partnerships
Chapter 29 - Revised Mississippi Limited Liability Company Act
Article 11 - Derivative Actions.
§ 79-29-1109. Dismissal.

Universal Citation: MS Code § 79-29-1109 (2018)
  • (1) A derivative proceeding shall be dismissed by the court on motion by the limited liability company if one of the groups specified in subsection (2) or (6) of this section has determined in good faith, after conducting a reasonable inquiry upon which its conclusions are based, that the maintenance of the derivative proceeding is not in the best interests of the limited liability company.

  • (2) Unless a panel is appointed pursuant to subsection (6) of this section, the determination in subsection (1) of this section shall be made by one (1) of the following:

    • (a) A majority vote of independent managers present at a meeting of managers if independent managers constitute a majority of all managers;

    • (b) A majority vote of independent members at a meeting of the members, whether or not such independent members constituted a majority of all members; or

    • (c) A majority vote of a committee consisting of two (2) or more independent managers appointed by the majority vote of independent managers present at a meeting of managers, whether or not such independent managers constituted a majority of all managers.

  • (3) None of the following shall by itself cause a manager or member to be considered not independent for purposes of this section:

    • (a) The nomination or election of the manager by persons who are defendants in the derivative proceeding or against whom action is demanded;

    • (b) The naming of the manager or member as a defendant in the derivative proceeding or as a person against whom action is demanded; or

    • (c) The approval by the manager or member of the act being challenged in the derivative proceeding if the act resulted in no personal benefit to the manager or member.

  • (4) If a derivative proceeding is commenced after a determination has been made rejecting a demand by a member, the complaint shall allege with particularity facts establishing either:

    • (a) That a majority of the persons making the determination under subsection (2) of this section were not independent at the time the determination was made; or

    • (b) That the requirements of subsection (1) of this section have not been met.

  • (5) If the determination in subsection (1) of this section is made by a committee pursuant to subsection (2)(c) of this section and a majority of managers are not independent at the time the determination is made, or if the determination in subsection (1) is made by the members pursuant to subsection (2)(b) of this section and a majority of the members are not independent at the time the determination is made, then the limited liability company shall have the burden of proving that the requirements of subsection (1) have been met. In all other cases, the plaintiff shall have the burden of proving that the requirements of subsection (1) of this section have not been met.

  • (6) The court may appoint a panel of one or more independent persons upon motion by the limited liability company to make a determination whether the maintenance of the derivative proceeding is in the best interests of the limited liability company. In such case, the plaintiff shall have the burden of proving that the requirements of subsection (1) of this section have not been met.

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