Derivative Or Direct?

A sometimes confusing area of corporate litigation concerns whether a claim asserted by a stockholder in a lawsuit against a corporation's officers and directors is a "derivative" claim brought on behalf of the corporation, or a "direct" claim brought by the stockholder on his or her own behalf rather than the corporation's. The distinction is important, as the proper characterization of a stockholder claim can have a significant impact on the parties and how the lawsuit proceeds, in some instances determining whether it proceeds at all. In a new opinion, <i>Tooley v. Donaldson, Lufkin &amp; Jenrette, Inc.</i>, the Delaware Supreme Court has cleared up some of the confusion, holding that a claim is derivative whenever the corporation has suffered the alleged harm and will be the beneficiary of the relief granted by the court.

18 minute readMay 26, 2004 at 10:46 AM
By
Joe Click
Derivative Or Direct?

A sometimes confusing area of corporate litigation concerns whether a claim asserted by a stockholder in a lawsuit against a corporation's officers and directors is a “derivative” claim brought on behalf of the corporation,

This premium content is locked for LawJournalNewsletters subscribers only

ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN LawJournalNewsletters

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts
Subscribe Now

Already have an account? Sign In Now

For enterprise-wide or corporate access, please contact Customer Service at [email protected] or call 1-877-256-2473.

NOT FOR REPRINT

© 2026 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Continue Reading

The Race You Didn’t Know You Were In: Why AI Is Setting the Pace for Law Firm Marketing

The volume and sophistication of work hitting law firm marketing departments is accelerating. That moves the burden from responding to being ready: ready with differentiated positioning, ready with competitive intelligence, ready to get a compelling pitch to the right client before a formal process even begins. That requires more sophisticated output, produced faster, by teams that are already stretched past capacity.

April 01, 2026

Copyright, Free Speech and Victim Rights In the Digital Age

The annals of copyright decisions could provide a reasonably representative catalog of what our culture has been up to over the past 200 years. A Feb. 3 decision from the Southern District of New York is a case in point. It involves a sex-trafficking conspiracy, Tweets attacking a troubled crypto firm, and a claimed transfer of copyright ownership through a restitution order in a criminal case, all over an undercurrent of competing First Amendment and victim-privacy concerns.

April 01, 2026

Matthew McConaughey Combats AI’s Unauthorized Use of His Voice and Likeness

Matthew McConaughey secured eight federal trademark registrations covering his voice and iconic catchphrases in a novel legal strategy aimed at combating AI’s unauthorized use of his voice and likeness. The move signals an important evolution in the power dynamics between talent/brands and the companies providing generative AI tools.

April 01, 2026