The Vermont Statutes Online
The Statutes below include the actions of the 2025 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
Subchapter
004
:
DERIVATIVE PROCEEDINGS
(Cite as: 11A V.S.A. § 7.40)
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§ 7.40. Procedure in derivative proceedings
(a) A person may not commence a proceeding in the right of a domestic or foreign corporation
unless such person was a shareholder of the corporation when the transaction complained
of occurred or unless such person became a shareholder through transfer by operation
of law from one who was a shareholder at that time.
(b) A complaint in a proceeding brought in the right of a corporation must be verified
and allege with particularity the demand made, if any, to obtain action by the board
of directors and either that the demand was refused or ignored or why he or she did
not make the demand. Whether or not a demand for action was made, if the corporation
commences an investigation of the charges made in the demand or complaint, the court
may stay any proceeding until the investigation is completed.
(c) A proceeding commenced under this section may not be discontinued or settled without
the court’s approval. If the court determines that a proposed discontinuance or settlement
will substantially affect the interest of the corporation’s shareholders or a class
of shareholders, the court shall direct that notice be given the shareholders affected.
(d) For purposes of this section, “shareholder” includes a beneficial owner whose shares
are held in a voting trust or held by a nominee on the shareholder’s behalf. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)