60-223a. Derivative actions by shareholders. - Kansas Statutes

60-223a

Chapter 60.--PROCEDURE, CIVIL Article 2.--RULES OF CIVIL PROCEDURE

      60-223a.   Derivative actions by shareholders.In a derivative action brought by one or more shareholders or members toenforce a right of a corporation or of an unincorporated association, thecorporation or association having failed to enforce a right which mayproperly be asserted by it, the petition shall be verified and shall allege(1) that the plaintiff was a shareholder or member at the time of thetransaction of which he complains or that his share or membershipthereafter devolved on him by operation of law, and (2) that the action isnot a collusive one to confer jurisdiction on a court of the state ofKansas which it would not otherwise have. The petition shall also allegewith particularity the efforts, if any, made by the plaintiff to obtain theaction he desires from the directors or comparable authority and, ifnecessary under the applicable law, from the shareholders or members, andthe reasons for his failure to obtain the action or for not making theeffort. The derivative action may be maintained only if the court issatisfied that the plaintiff will adequately represent the interest of thecorporation or association. In the conduct of the action the court may makeappropriate orders corresponding with those described in K.S.A. 60-223(d). The action may be dismissed or compromised only with the approval ofthe court upon notice to shareholders or members in such manner as thecourt may direct.

      History:   Order of Supreme Court dated July 17, 1969; effective onpublication in Kansas Reports and in K.S.A. 1969 Supp.