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An Introduction to the Law of Corporations: Cases and Materials, Fall 2017

DGCL Sec. 327 - Derivative actions

Headnote

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 people from observing some bad act and then buying into a lawsuit. 

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TITLE 8

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Corporations

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CHAPTER 1. GENERAL CORPORATION LAW

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Subchapter XIII. Suits Against Corporations, Directors, Officers or Stockholders

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In any derivative suit instituted by a stockholder of a corporation, it shall be averred in the complaint that the plaintiff was a stockholder of the corporation at the time of the transaction of which such stockholder complains or that such stockholder's stock thereafter devolved upon such stockholder by operation of law.

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8 Del. C. 1953, § 327; 56 Del. Laws, c. 5071 Del. Laws, c. 339, § 73.;