PA Bar Practice Questions - Pennsylvania Bar Examination Exam

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A shareholder of a corporation wants to sue the directors for harm done to the corporation itself by mismanagement. The recovery would belong to the corporation. What type of action must the shareholder typically bring, and what is a key procedural prerequisite?

A direct action, with no special prerequisites A class action on behalf of all customers A derivative action, generally requiring a demand on the board or a showing that demand would be futile A criminal complaint filed with the state attorney general

Correct Answer:

A derivative action, generally requiring a demand on the board or a showing that demand would be futile

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