UnifiedOnline Inc fka UOIP

[long uoip]

to note ~ any proceeds of a successful action are awarded to the corporation and not to the individual shareholders that initiate the action.

At its essence, a derivative suit is used as a means for a shareholder or group of shareholders, acting on behalf of the corporation, to reclaim value lost to the corporation by its management. Essentially, the form of a derivative action is the same as the form of any other lawsuit. On the plaintiff's side are two parties – the complaining shareholder and the corporation itself. On the defendant's side are management and the corporation again – this time as a “nominal” defendant (a defendant as a formality only). In the suit, the plaintiff shareholder will state a claim based on an argument that the corporation, via management, either took or failed to take some action that cost the corporation value.