The advantages of derivative claims over unfair prejudice petitions
An LLP member or company shareholder:
- who is in the minority and thus outvoted, and
- whose co-proprietors have misused or misappropriated business assets (including the misdirection of corporate opportunities),
may in some circumstances be able to pursue a claim against his co-proprietors on behalf of the LLP or company (even though the LLP or company is otherwise controlled by the misbehaving majority), in order to seize back the assets and/or to recover compensation for the LLP or company. Furthermore the LLP or company might well be ordered, at the outset of the claim, and throughout the conduct of the claim, to pay most of the member/shareholder’s legal costs incurred in bringing the claim.
