Bill Text: NC H649 | 2015-2016 | Regular Session | Amended
Bill Title: Amend Corp. Gov/Shareholder Derivative Suits
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2015-04-30 - Ref To Com On Rules and Operations of the Senate [H649 Detail]
Download: North_Carolina-2015-H649-Amended.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2015
H 2
HOUSE BILL 649
Committee Substitute Favorable 4/30/15
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Short Title: Amend Corp. Gov/Shareholder Derivative Suits. |
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Sponsors: |
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Referred to: |
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April 14, 2015
A BILL TO BE ENTITLED
AN ACT to amend the statutes relating to the procedures in shareholder derivative suits.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 55‑7‑40.1 reads as rewritten:
"§ 55‑7‑40.1. Definitions.
In this Part:
(1) "Derivative proceeding" means a Complaint.
– A civil complaint filed in a derivative proceeding.
(1a) Derivative proceeding. – A civil suit in the right of a domestic corporation or, to the extent provided in G.S. 55‑7‑47, in the right of a foreign corporation.
(2) "Shareholder" has Shareholder.
– Has the same meaning as in G.S. 55‑1‑40 and includes a
beneficial owner whose shares are held in a voting trust or held by a nominee
on the beneficial owner's behalf."
SECTION 2. G.S. 55‑7‑42 reads as rewritten:
"§ 55‑7‑42.
Demand.Demand; rejection of demand.
(a) No shareholder may commence a derivative proceeding until:
(1) A written demand has been made upon the corporation to take suitable action; and
(2) 90 days have expired from the date the demand was
made unless,unless one of the following applies:
a. prior Prior to the expiration
of the 90 days, the shareholder was notified that the corporation rejected the demand,
or unless demand.
b. The court determines that imminent irreparable injury to the corporation would result by waiting for the expiration of the 90‑day period.
(b) The failure of the corporation to respond to a demand shall not be deemed to be a decision or acknowledgement that the derivative proceeding is in the best interest of the corporation or should proceed, and such a failure does not compromise or affect any of the rights of the corporation under this Part or other applicable law.
(c) In the event that the corporation rejects a demand, the corporation shall promptly provide the shareholder written notice of the rejection. The notice must include a summary of the reasons for the rejection of the demand and the identity of the directors of the corporation who approved the rejection of the demand."
SECTION 3. G.S. 55‑7‑45(a) reads as rewritten:
"(a) A derivative proceeding may not be discontinued or settled without the court's approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the corporation's shareholders or a class of shareholders, the court shall direct that notice be given to the shareholders affected. Notice may be provided in any method approved by the court, including, for a public corporation, by publication of a press release through a news release service with national distribution."
SECTION 4. G.S. 55‑7‑47 reads as rewritten:
"§ 55‑7‑47. Applicability to foreign corporations.
In any derivative proceeding in the right of a foreign corporation, the matters covered by this Part shall be governed by the laws of the jurisdiction of incorporation of the foreign corporation except for the matters governed by G.S. 55‑7‑43, 55‑7‑45, and 55‑7‑46. The repose period in G.S. 55‑7‑48(2) applies to a foreign corporation if its principal office is located in North Carolina."
SECTION 5. This act becomes effective October 1, 2015, and applies to demands made and complaints filed on or after that date.
