Main Content

Introduction to the Law of Corporations: Cases and Materials

DGCL § 327 - Derivative actions

In order to have standing in derivative litigation, a stockholder must have already been a stockholder at the time of the bad act that gave rise to the litigation. This requirement prevents potential plaintiffs from observing some bad act and then buying into a lawsuit.  Notice that there is no deminimis requirement for stock ownership. A stockholder with any number of shares, provided they were stockholders at the time of the bad act, may bring a derivative action.