North Dakota Code 10-15-56 – Member or stockholder derivative actions
1. No action may be instituted or maintained in the right of any association by a member or stockholder unless the member or stockholder:
Terms Used In North Dakota Code 10-15-56
- Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
- Person: means an individual, organization, government, political subdivision, or government agency or instrumentality. See North Dakota Code 1-01-49
- Plaintiff: The person who files the complaint in a civil lawsuit.
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See North Dakota Code 1-01-49
a. Alleges in a complaint that the person was a member or registered stockholder when any part of the transaction of which the person complains took place, or that the person’s stock thereafter devolved upon the person by operation of law from a stockholder at such time.
b. Alleges in a complaint with particularity the person’s efforts to secure from the board such action as the person desires. The person shall allege further that the person has either informed the association or board in writing of the ultimate facts of each claim for relief against each director or that the person has delivered to the association or board a copy of the complaint which the person proposes to file. The person shall state the reasons for the person’s failure to obtain such action or the reasons for not making such effort.
2. The action shall not be dismissed or compromised without the approval of the court.
3. If anything is recovered or obtained as the result of the action, whether by means of a compromise and settlement or by a judgment, the court may, out of the proceeds of the action, award the plaintiff the reasonable expenses of maintaining the action, including reasonable attorney’s fees, and may direct the plaintiff to account to the association for the remainder of such proceeds.
4. In any action brought in the right of an association by less than three percent of the members or by holders of less than three percent of any class of stock outstanding, the defendants may require the plaintiff to give security for the reasonable expenses of defending such action, including attorney’s fees. The amount of such security may thereafter be increased or decreased in the discretion of the court upon showing that the security provided is or may be inadequate or is excessive.