15A:3-5 - Provisions relating to actions in the right of a corporation - New Jersey Statutes

15A:3-5.  Provisions relating to actions in the right of a corporation    a.  No action shall be brought in this State by a member in the right of a domestic or foreign corporation unless the plaintiff was a member at the time of the transaction of which the plaintiff complains.

    b.  In any action hereafter instituted in the right of the corporation by a  member, the court having jurisdiction, upon final judgment and a finding that  the action was brought without reasonable cause, may require the plaintiff to  pay to the parties named as defendant the reasonable expenses, including fees  of attorneys, incurred by them in the defense of the action.

    c.  In any action now pending or hereafter instituted or maintained in the right of the corporation by less than 5% of the members or any class of members, the corporation in whose right the action is brought shall be entitled  at any time before final judgment to require the plaintiff to give security for  the reasonable expenses, including fees of attorneys, that may be incurred by  it in connection with the action or may be incurred by other parties named as  defendant for which it may become legally liable.  The amount of the security  may from time to time be increased or decreased, in the discretion of the  court, upon showing that the security provided has or may become inadequate or  excessive.  The corporation shall have recourse to the security in an amount as  the court having jurisdiction shall determine upon the termination of the  action.

    d.  This section shall not impair, restrict, or impose a condition on any right of a trustee of a corporation with or without members, to bring an action  in this State in the right of a domestic or foreign corporation.

     L.1983, c. 127, s. 15A:3-5, eff. Oct. 1, 1983.