Definitions for "Derivative Action"
A derivative action is a lawsuit brought by a shareholder on behalf of the corporation. In a derivative action, the individual plaintiff seeks to enforce the rights of the corporation as an entity (not the shareholder's personal rights) against defendants. A unitholder or limited partner in a limited partnership may also bring a derivative action on the partnership's behalf. A derivative Plaintiff must own stock prior to the wrongs complained of and must continue to hold stock of the corporation through the litigation. Recoveries obtained through derivative litigation are payable to the corporation directly.
A type of control system action in which a predetermined relation exists between the position of the final control element and the derivative of the controlled variable with respect to time.
a lawsuit brought by a shareholder of a corporation, on behalf of the corporation, to enforce a cause of action against a third party, such as an officer or director of that corporation