§ 627. Security for expenses in shareholders' derivative action brought in the right of the corporation to procure a judgment in its favor.
249 words·~1 min read·
/ny/business-corporation/shareholders/627·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
§ 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.