Shareholder / Member Derivative Actions

The attorneys at Henry & McCord have successfully represented clients as shareholders/members of a Corporation/LLC in derivative litigation. Traditionally, a Corporation/LLC’s management is responsible for prosecuting claims on behalf of the entity with respect to the operations of the entity and with respect to corporate malfeasance or when corporate mismanagement leads to serious abuse and damages. However, when management fails to take action in the best interests of the Corporation/LLC, the shareholders/members may bring a derivative action to assert the Corporation/LLC’s rights and protect shareholder/member interests. Through its derivative litigation practice, Henry & McCord has obtained important decisions benefitting plaintiff shareholders/members.

A derivative action can be used to protect the assets and value of the Corporation/LLC and to assert Shareholder/Members’ rights. However, there are complex and specific processes that must be followed in pursuing a shareholder derivative suit or class action. The attorneys at Henry & McCord put over 145 years of proven experience and knowledge behind every case.

Our firm represents shareholders and members in plaintiff actions who have lost substantial value as a result of:

• Accounting malpractice
• Corporate mismanagement
• Fraud
• Embezzlement
• False reporting of financial status

The Tennessee litigation lawyers at Henry & McCord will fight aggressively to ensure that a company’s directors and officers live up to their statutory and fiduciary duties and that the directors and officers of a corporation make decisions that support corporate health and that maximize shareholder value.

Representative Cases:

MEMBER DERIVATIVE SUIT FILED IN COFFEE COUNTY, TENNESSEE AGAINST COFFEE MEDICAL GROUP, LLC d/b/a UNITED REGIONAL MEDICAL CENTER AND ITS FORMER CEO (Lisa Veteto and The Fairmont Group, LLC v. Coffee Medical Group, LLC d/b/a United Regional Medical Center, et. al., Case No. 10-282, Chancery Court of Coffee County, Tennessee).

SHAREHOLDER DERIVATIVE SUIT FILED IN LINCOLN COUNTY, TENNESSEE AGAINST PRICHARDS’ DISTILLERY, INC. AND ITS OFFICERS AND DIRECTORS (Larry Sheaks, Individually and Derivatively on Behalf of the Nominal Defendant Prichards’ Distillery, Inc. v. Prichards’ Distillery, Inc. et. al., Case No. 00012181, Chancery Court of Lincoln County, Tennessee).

MEMBER DERIVATIVE SUIT FILED IN FRANKLIN COUNTY, TENNESSEE AGAINST DIVERSATECH PLASTICS GROUP, LLC, SENTRY INVESTMENTS, LLC AND SENTRY FINANCIAL CORPORATION (United States District Court for the Eastern District of Tennessee, Case No. 4:04-CV-53)

SHAREHOLDER DERIVATIVE SUIT FILED IN FRANKLIN COUNTY, TENNESSEE ALLEGING DIRECTOR AND OFFICER CONFLICT OF INTEREST AND UNLAWFUL DISTRIBUTIONS (Jones v. WM. F. Yarbrough, Inc. et. al., Case No. 17,136)