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Shareholder Derivative Suits – The Next Wave of COVID-19 Litigation? | Ballard Spahr LLP


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The COVID-19 pandemic has led to a variety of claims brought by employees, as well as government enforcement actions. Recently-filed cases are taking a new tack; shareholders are bringing derivative suits and securities claims related to companies’ coronavirus responses. We answer ten questions about these lawsuits and the types of workforce issues that could lead to them.
1. What is a shareholder derivative suit?
It is a lawsuit brought by a shareholder or group of shareholders to assert a claim belonging to the company against, most often, directors and officers. They may, although rarely, be asserted against third parties. Shareholder derivative suits often allege directors and officers breached their fiduciary duty of loyalty or care to the corporation. ....

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