Cases›Shareholder Derivative Actions
Corporate Governance Litigation

Shareholder Derivative Actions

When corporate insiders breach their duties to the company, shareholders have the right to sue on the corporation's behalf. BG&G pursues accountability through derivative litigation — seeking both financial recovery and lasting governance reform.

What Is It?

Suing on Behalf of the Corporation

A shareholder derivative action is a lawsuit brought by a shareholder on behalf of the corporation itself. Unlike a securities class action, where investors sue to recover their own losses, a derivative suit targets misconduct that harmed the company, with any recovery flowing back to the corporation.

These cases typically arise when a company's board of directors fails or refuses to take action against wrongdoing by its own officers, directors, or controlling shareholders. By bringing the claim derivatively, shareholders force accountability that the corporation itself will not pursue.

In many cases, derivative litigation yields not only cash recoveries but binding governance reforms or structural changes that protect shareholders and the company from future misconduct.

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When those entrusted to run a public company abuse that trust — through self-dealing, excessive compensation, or deliberate oversight failures — shareholders have both the right and the means to hold them accountable.

Yael Nathanson, Of Counsel
Bronstein, Gewirtz & Grossman, LLC
Common Claims

Types of Corporate Misconduct We Pursue

Breach of Fiduciary Duty
Directors and officers owe duties of loyalty and care to the corporation. When they put personal interests above the company's, shareholders can act.
Misleading Disclosures
Board-level misrepresentations to investors or regulators can give rise to derivative claims for the harm caused to the corporation.
Excessive Compensation
Unreasonable executive pay packages that lack business justification may constitute a waste of corporate assets recoverable through derivative litigation.
Conflicted Transactions
Self-dealing by insiders — including related-party transactions approved without proper oversight — are prime targets for derivative suits.
Insider Trading
Officers and directors who trade on material non-public information harm the corporation and its shareholders and may be held accountable through derivative claims.
Failed Internal Controls
When a board fails to establish adequate compliance and oversight frameworks, the resulting harm to the company may be actionable.
Understanding the Difference

Derivative Actions vs. Securities Class Actions

Derivative Action
Securities Class Action
Who brings the claim
A shareholder suing on behalf of the corporation
A class of investors suing on their own behalf
Who recovers
The corporation itself
Individual class members (investors)
Target of wrongdoing
Directors, officers, or insiders
The company and its executives
Primary remedy
Corporate governance reform + cash to company
Monetary compensation to harmed investors
Demand requirement
Board demand required or excused
No board demand required
Stock ownership needed
At least one share, held continuously
Purchase during the class period

Note: Both types of litigation may arise from the same set of facts. Parallel derivative and class action claims can be pursued to maximize recovery for shareholders and the corporation alike.

Our Approach

How We Pursue Derivative Claims

01
Step 01
Case Assessment
We review the alleged misconduct, assess whether a board demand is required or excused under applicable law, and evaluate the strength of potential claims.
02
Step 02
Investigation
Our team gathers board minutes, executive communications, compensation records, and public filings to build a comprehensive factual record.
03
Step 03
Filing & Litigation
We draft and file a derivative complaint on behalf of the company. We pursue discovery, expert testimony, and motions practice to advance the case.
04
Step 04
Resolution
We may pursue monetary recovery flowing to the corporation and/or binding governance reforms — including board independence requirements, clawback policies, and enhanced oversight.
Who Can File

Eligibility Requirements

You do not need to own a large stake in the company. Any shareholder who held at least one share at the time of the alleged misconduct — and who continues to hold shares throughout the litigation — is typically eligible to bring or participate in a derivative action. There is no minimum investment threshold.

1 Share
Minimum Shares
No large stake required
Required
Continuous Holding
Must hold through litigation
$0
Your Cost
No fee. Period.

Think Your Company Has Been Harmed by Insider Misconduct?

Contact BG&G for a free, confidential evaluation of your potential derivative claim. There is no fee for our representation.

Prior results do not guarantee a similar outcome.