Oregon Law Review : Vol. 90, No. 3, p. 773-796 : Litigation Supply Should Not Exceed Shareholder ADR Demand: How Proper Use of the Demand Requirement in Derivative Suits Can Decrease Corporate Litigation
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Date
2012
Authors
Barsalona, Joseph C.
Journal Title
Journal ISSN
Volume Title
Publisher
University of Oregon School of Law
Abstract
This Comment explores the contours of the demand requirement—
the forgotten alternative dispute resolution (ADR) mechanism available to all litigating
shareholders—and how its efficient use could be beneficial for all
parties as well as for the greater corporate community. Part I
describes the derivative suit and the demand requirement generally,
with particular attention focused on the procedures in Delaware and
New York. Because these two states have the highest number of
domestic incorporations of all states,13 it is important to see how their
processes change the landscape of the requirement.
Part II delves more deeply into the demand requirement and begins
to explain its ADR policies and characteristics. Part III describes the
MBCA model and explains why it gives the best possibility for
improvement with corporate ADR. Part III discusses the positive
effects in the states that have adopted the MBCA and how the same
changes to other corporate codes could be the best way for companies
and shareholders to save time and money. Finally, the Comment
reemphasizes the importance of the demand requirement, argues why
more states and corporations would benefit from it, and promotes the
MBCA as an effective model for the future.
Description
24 pages
Keywords
Citation
90 Or. L. Rev. 773 (2012)