Quick Supply House breached a contract with MegaCorp.The breach resulted in the loss of a great deal of money to MegaCorp.The board of directors for MegaCorp vote not to sue the supply house since it believes the legal costs would be more than it would probably recover.If a group of shareholders wish to sue the supply house,this would
A)be a type of direct lawsuit.
B)have to be a derivative lawsuit.
C)be a settlement lawsuit.
D)be an SEC lawsuit.

Question

Quizplus · Accepted Answer

Shareholders wishing to sue on behalf of the company would have to file a derivative lawsuit. This type of lawsuit is brought by shareholders on behalf of the company when the board of directors decides not to pursue legal action.

Quick Supply House Breached a Contract with MegaCorp