21-2086 Removal of directors by judicial proceeding. - Nebraska Statutes

21-2086. Removal of directors by judicial proceeding.(1) The district court of the county where a corporation's principal office, or, if none in this state, its registered office, is located, may remove a director of the corporation from office in a proceeding commenced either by the corporation or by its shareholders holding at least ten percent of the outstanding shares of any class if the court finds that (a) the director engaged in fraudulent or dishonest conduct or gross abuse of authority or discretion with respect to the corporation and (b) removal is in the best interests of the corporation.(2) The court that removes a director may bar the director from reelection for a period prescribed by the court.(3) If shareholders commence a proceeding under subsection (1) of this section, they shall make the corporation a party defendant. SourceLaws 1995, LB 109, § 86. AnnotationsThe language of this section leads to the conclusion that judicial removal of a director is an extraordinary remedy. Neiman v. Tri R Angus, 274 Neb. 252, 739 N.W.2d 182 (2007). To succeed in an action brought under subsection (1) of this section, the prohibited conduct must be proved, and it must be shown that removal of a director is in the best interests of the corporation. More specifically, the district court may remove a director in an action brought by shareholders holding at least 10 percent of the outstanding shares if the court, after reviewing the evidence, finds that the director engaged in fraudulent or dishonest conduct or engaged in a gross abuse of authority or discretion with respect to the corporation and also finds that the removal of the director is in the corporation's best interests. Neiman v. Tri R Angus, 274 Neb. 252, 739 N.W.2d 182 (2007).