13.1-672.1 - Standing; condition precedent; stay of proceedings. - Virginia Statutes

§ 13.1-672.1. Standing; condition precedent; stay of proceedings.

A. A shareholder shall not commence or maintain a derivative proceedingunless the shareholder:

1. Was a shareholder of the corporation at the time of the act or omissioncomplained of;

2. Became a shareholder through transfer by operation of law from one who wasa shareholder at that time; or

3. Became a shareholder before public disclosure and without knowledge of theact or omission complained of; and

4. Fairly and adequately represents the interests of the corporation inenforcing the right of the corporation.

B. No shareholder may commence a derivative proceeding until:

1. A written demand has been made on the corporation to take suitable action;and

2. Ninety days have expired from the date delivery of the demand was madeunless (i) the shareholder has been notified before the expiration of 90 daysthat the demand has been rejected by the corporation or (ii) irreparableinjury to the corporation would result by waiting until the end of the 90-dayperiod.

C. If the corporation commences a review and evaluation of the allegationsmade in the demand or complaint, the court may stay any derivative proceedingfor such period as the court deems appropriate.

(1992, c. 802; 2007, c. 165; 2010, c. 782.)