Florida Statutes 605.0804 – Special litigation committee
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(1) If a limited liability company is named as or made a party in a derivative action, the company may appoint a special litigation committee to investigate the claims asserted in the derivative action and determine whether pursuing the action is in the best interest of the company. If the company appoints a special litigation committee, on motion, except for good cause shown, the court may stay any derivative action for the time reasonably necessary to permit the committee to make its investigation. This subsection does not prevent the court from:
(a) Enforcing a person‘s rights under the company’s operating agreement or this chapter, including the person’s rights to information under s. 605.0410; or
Terms Used In Florida Statutes 605.0804
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
- Interest: means :(a) A share in a business corporation;(b) A membership in a nonprofit corporation;(c) A partnership interest in a general partnership;(d) A partnership interest in a limited partnership;(e) A membership interest in a limited liability company;(f) A share or beneficial interest in a real estate investment trust;(g) A member's interest in a limited cooperative association;(h) A beneficial interest in a statutory trust, business trust, or common law business trust; or(i) A governance interest or distributional interest in another entity. See Florida Statutes 605.0102
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- Manager-managed limited liability company: means a limited liability company that is manager-managed by virtue of the operation of…. See Florida Statutes 605.0102
- Member-managed limited liability company: means a limited liability company that is not a manager-managed limited liability company. See Florida Statutes 605.0102
- Operating agreement: means an agreement, whether referred to as an operating agreement or not, which may be oral, implied, in a record, or in any combination thereof, of the members of a limited liability company, including a sole member, concerning the matters described in…. See Florida Statutes 605.0102
- Person: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or another legal or commercial entity. See Florida Statutes 605.0102
- Plaintiff: The person who files the complaint in a civil lawsuit.
- Temporary restraining order: Prohibits a person from an action that is likely to cause irreparable harm. This differs from an injunction in that it may be granted immediately, without notice to the opposing party, and without a hearing. It is intended to last only until a hearing can be held.
(b) Exercising its equitable or other powers, including granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.
(2) A special litigation committee must be composed of one or more disinterested and independent individuals, who may be members.
(3) A special litigation committee may be appointed:
(a) In a member-managed limited liability company, by the consent of the members who are not named as parties in the derivative action, who are otherwise disinterested and independent, and who hold a majority of the current percentage or other interest in the profits of the company owned by all of the members of the company who are not named as parties in the derivative action and who are otherwise disinterested and independent;
(b) In a manager-managed limited liability company, by a majority of the managers not named as parties in the derivative action and who are otherwise disinterested and independent; or
(c) Upon motion by the limited liability company, consisting of a panel of one or more disinterested and independent persons.
(4) After appropriate investigation, a special litigation committee shall determine what action is in the best interest of the limited liability company, including continuing, dismissing, or settling the derivative action or taking another action that the special litigation committee deems appropriate.
(5) After making a determination under subsection (4), a special litigation committee shall file or cause to be filed with the court a statement of its determination and its report supporting its determination and shall serve each party to the derivative action with a copy of the determination and report. Upon motion to enforce the determination of the special litigation committee, the court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made its recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court may enforce the determination of the committee. Otherwise, the court shall dissolve any stay of derivative action entered under subsection (1) and allow the derivative action to continue under the control of the plaintiff.