In Texas, can the President of a closely held corporation sue that company's majority shareholder/director/officer in a suit

Asked almost 2 years ago - Fort Worth, TX

In a suit brought in the Company's name against the shareholder/director/officer individually? How do you get a case like this dismissed? The President is a minority shareholder/director and never got permission from the directors or shareholders to sue the director he sued in his individual capacity. Also, is the majority shareholder/director/officer entitled to indemnification from the company?

Attorney answers (1)

  1. Robert Neil Newton

    Pro

    Contributor Level 16

    1

    Lawyer agrees

    Answered . From the facts you presented, it appears the president, as a shareholder, brought a derivative lawsuit against another officer/director. These can be complicated procedures. In regards to indemnification, it would depend on a host of issues, including provisions of the certificate of formation, the state law in the jurisdiction in which the corporation was formed, and the acts being considered.

    The officer/director should strongly consider hiring an attorney.

    The above statements are provided as general information and not intended as legal advice. Each matter has its own... more

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