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Texas Finance Code - Section 66.401. Derivative Suit

Legal Research Home > Texas Lawyer > Finance Code > Texas Finance Code - Section 66.401. Derivative Suit

§ 66.401. DERIVATIVE SUIT.  (a) The commissioner may 
bring a derivative suit on behalf of an association on an unpursued 
cause of action if:
		(1)  the commissioner determines that the suit should 
be brought to protect the public interest or the interest of the 
association or the shareholders, members, or creditors of the 
association;  and
		(2)  the association has not brought suit on the action 
before the 31st day after the date on which the commissioner gives 
notice to the association that suit should be brought.
	(b)  Except as provided by another statute that provides for 
mandatory venue, venue is in a district court of Travis County.
	(c)  The commissioner may employ legal counsel to bring and 
prosecute a derivative suit.  The commissioner may:
		(1)  pay the counsel from funds appropriated for the 
operation of the Savings and Loan Department;  or
		(2)  require the association for which the suit is 
brought to pay the counsel directly or to reimburse the Savings and 
Loan Department for the payment.
	(d)  The association shall be paid an amount equal to the 
amount of the proceeds of a judgment on a suit brought under this 
section less unreimbursed costs and expenses, including attorney's 
fees, incurred by the Savings and Loan Department in prosecuting 
the suit.
	(e)  In this section, "unpursued cause of action" means an 
existing claim belonging to an association on which a suit or other 
effective action has not been filed or taken by or on behalf of the 
association on or before the last day of the sixth month after the 
date on which the cause of action arose, involving:
		(1)  a claim for monetary damages or recovery of 
property;                  
		(2)  a claim for equitable relief;                                            
		(3)  a cause of action for breach of contract or for 
enforcement of a contract;  or
		(4)  a claim on a fidelity bond.                                              

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   

Last modified: August 10, 2007