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New York Business Corporations Law Section 627 - Security For Expenses In Shareholders' Derivative Action Brought In The Right Of The Corporation To Procure A Judgment In Its Favor.

Legal Research Home > New York Lawyer > Business Corporations > New York Business Corporations Law Section 627 - Security For Expenses In Shareholders' Derivative Action Brought In The Right Of The Corporation To Procure A Judgment In Its Favor.

  § 627. Security  for expenses in shareholders' derivative action brought
           in the right of the corporation to procure a  judgment  in  its
           favor.
    In  any  action  specified  in  section  626 (Shareholders' derivative
  action brought in the right of the corporation to procure a judgment  in
  its favor), unless the plaintiff or plaintiffs hold five percent or more
  of any class of the outstanding shares or hold voting trust certificates
  or  a beneficial interest in shares representing five percent or more of
  any class of such shares, or the shares, voting trust  certificates  and
  beneficial interest of such plaintiff or plaintiffs have a fair value in
  excess  of  fifty  thousand dollars, the corporation in whose right such
  action is brought shall be entitled at  any  stage  of  the  proceedings
  before  final  judgment  to  require the plaintiff or plaintiffs to give
  security for the reasonable expenses, including attorney's  fees,  which
  may  be  incurred  by it in connection with such action and by the other
  parties defendant in connection therewith for which the corporation  may
  become  liable under this chapter, under any contract or otherwise under
  law, to which the corporation shall have recourse in such amount as  the
  court  having  jurisdiction  of  such  action  shall  determine upon the
  termination of such action. The amount of such security  may  thereafter
  from  time  to  time  be increased or decreased in the discretion of the
  court having jurisdiction of such action upon showing that the  security
  provided has or may become inadequate or excessive.

Last modified: August 10, 2006