A. A derivative proceeding may be dismissed by the court on motion by the corporation on any legal grounds including the group specified in subsection B has determined in good faith after conducting a reasonable inquiry on which its conclusions are based that the maintenance of the derivative proceeding is not in the best interests of the corporation.

Terms Used In Arizona Laws 10-744

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Court: means the superior court of this state. See Arizona Laws 10-140
  • Derivative proceeding: means a civil suit in the right of a domestic corporation or, to the extent provided in section 10-747, in the right of a foreign corporation. See Arizona Laws 10-740
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
  • Person: includes an individual and entity. See Arizona Laws 10-140
  • Plaintiff: The person who files the complaint in a civil lawsuit.
  • Proceeding: includes a civil suit and a criminal, administrative and investigatory action. See Arizona Laws 10-140

B. The court may appoint a panel of one or more independent persons on motion by the corporation to determine whether the maintenance of the derivative proceeding is in the best interests of the corporation. In such case, the plaintiff has the burden of proving by clear and convincing evidence that the requirements of subsection A have not been met. A person appointed by the court is not liable whatsoever for a determination made pursuant to this section.

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