Welcome to The Jayson Law Group LLC\u2019s<\/a> final post on the Revised Uniformed Limited Liability Company Act\u2019s<\/a> (\u201cRULLCA\u201d) derivative action rules.\u00a0 In Part 1<\/a> we discussed what a derivative action is and how a derivative action can be brought.\u00a0 In Part 2<\/a> we discussed the proper plaintiff and what the proper plaintiff must allege in the complaint.\u00a0 In Part 3<\/a> we began our discussion of Special Litigation Committees and how they are created.\u00a0 In Part 4 we will discuss what the Special Litigation Committee does and what happens to the benefits and proceeds from a successful derivative action.\u00a0<\/span><\/p>\n

What does the Special Litigation Committee Do<\/strong><\/p>\n

The purpose of the Special Litigation Committee is determined what is best for the LLC as it relates to the derivative action<\/a>.\u00a0 The Special Litigation Committee can decide that the derivative action should proceed under the plaintiff\u2019s control, under the Special Litigation Committee\u2019s control, be settled on the Special Litigation Committee\u2019s terms, or be dismissed.<\/span><\/p>\n

Once the Special Litigation Committee<\/a> makes this determination they will file a statement of their determination with the court.\u00a0 It must also give notice to the plaintiff of its determination.\u00a0 Upon receiving this statement of determination from the Special Litigation Committee, the court must determine if the people on the Special Litigation Committee were disinterested and independent and whether the investigation and conclusions of the Special Litigation Committee were independent, in good faith, and with reasonable care.\u00a0 It is the burden of the Special Litigation Committee to prove such conditions existed.\u00a0 If the court decides that the Special Litigation Committee met these requirements then it shall enforce the Special Litigation Committee\u2019s recommendation.\u00a0 If the court is not satisfied with the independency, good faith, and reasonable care of the Special Litigation Committee then the court shall dissolve the discovery stay and let the plaintiff\u2019s suit continue.<\/span><\/p>\n

What Happens if the Plaintiff is Successful in the Derivative Action<\/strong><\/p>\n

If the Plaintiff is successful in the derivative action any proceeds or benefits from the derivative action belong to the limited liability company.\u00a0 If the plaintiff receives any proceeds from the derivative action, the plaintiff must remit those proceeds to the limited liability company immediately.\u00a0 However, the court may award the plaintiff reasonable expenses, including attorney\u2019s fees and costs, from the recovery of the limited liability company.<\/span><\/p>\n

That concludes The Jayson Law Group LLC\u2019s<\/a> examination of the RULLCA\u2019s new rules on derivative actions<\/a>.\u00a0 Stay tuned for more posts on New Jersey\u2019s business laws.<\/span><\/p>\n

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Welcome to The Jayson Law Group LLC\u2019s final post on the Revised Uniformed Limited Liability Company Act\u2019s (\u201cRULLCA\u201d) derivative action rules.\u00a0 In Part 1 we discussed what a derivative action is and how a derivative action can be brought.\u00a0 In …<\/p>\n","protected":false},"author":2,"featured_media":1780,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-1662","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-law"],"yoast_head":"\n