Red Cat Holdings Inc (RCAT)

[investor2004]

Would two OFFICIAL Company Shareholder Votes Qualify Here As Notice?

https://smallbusiness.chron.com/classaction-vs-derivative-shareholder-lawsuits-72779.html

Purposes of Shareholder Derivative Lawsuits

The main purpose of shareholder derivative lawsuits is to allow shareholders to pursue claims against the corporation in which they hold shares. While class-action lawsuits allow a specific group of shareholders to sue the corporation -- for example, shareholders who purchased stock in a particular time period -- a shareholder derivative lawsuit encompasses the interests of all the shareholders. Shareholders frequently bring derivative lawsuits against their corporation as a means of settling disputes between shareholders and corporate management, especially in matters concerning corporate governance and allegations of mismanagement.

Requirements of Shareholder Derivative Lawsuits

Before shareholders can file a shareholder derivative lawsuit, they must first petition the corporation's management to rectify the behavior that prompted the suit. If the management refuses to comply, the shareholders must show that the corporate management's actions were sufficient to hurt their positions and that the corporation refuses remedy the situation. Shareholder derivative lawsuits can also serve to expose potential conflicts of interest within corporate management during the discovery process and show how this behavior damaged the stock value.