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Jun 17

Written by: Eric Wolfram
6/17/2009 9:42 AM 

Texas Business Corporation Act, Article 5.15(C) says:

C. Demand. No shareholder may commence a derivative proceeding until:

(1) a written demand is filed with the corporation setting forth with particularity the act, omission, or other matter that is the subject of the claim or challenge and requesting that the corporation take suitable action; and ...

However, the Supreme Court has added into the statute another requirement:

the demand required by the article must name the shareholder on whose behalf it is made.

In Re Schmitz, No. 07-0581, 52 Tex. S. Ct. J.  772 (Tex. 2009).  I guess the legislature was not competent to say what it really meant.


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