(1) No action may be instituted or maintained in the right of any cooperative by a member or shareholder unless the member or shareholder:
(a) Alleges in the complaint that the member or shareholder was a member or shareholder of record when any part of the transaction of which complained took place, or that the membership or stock thereafter devolved upon the member or shareholder by operation of law from a member or shareholder at such time.
(b) Alleges in the complaint with particularity the efforts of the member or shareholder to secure from the board such action as desired. The member or shareholder shall further allege that the member or shareholder has either informed the cooperative or board in writing of the ultimate facts of each cause of action against each director or delivered to the cooperative or board a copy of the complaint proposed to be filed. The member or shareholder shall state the reasons for failure to obtain such action or the reasons for not making such effort.
(c) Files a complaint in such action within 20 days after notification given to the cooperative or board as provided by paragraph (b) of this subsection.
(2) The action shall not be dismissed or compromised without the approval of the court.
(3) If anything is recovered or obtained as the result of the action, whether by means of a compromise and settlement or by a judgment, the court may direct the plaintiff to account to the cooperative for the remainder of the proceeds.
(4) In an action brought in the right of a cooperative by fewer than three percent of the members or by holders of less than three percent of any class of stock outstanding, the defendants may require the plaintiff to give security for the reasonable expenses of defending the action, including attorney fees. The amount of the security may thereafter be increased or decreased in the discretion of the court upon showing that the security provided is or may be inadequate or is excessive.
(5) The court may award reasonable attorney fees to the prevailing party in an action under this section. [1957 c.716 §69; 1981 c.897 §15; 1995 c.618 §38]
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