If Eilene, a shareholder, sues in a derivative suit, the judgment will be paid to:
A) the shareholders as a dividend.
B) Eilene directly.
C) the corporate treasury.
D) the board of directors.

Question

Quizplus · Accepted Answer

In a derivative suit, any judgment awarded is paid to the corporate treasury, not directly to the shareholder who initiated the suit, the board of directors, or as a dividend to shareholders. This is because the suit is brought on behalf of the corporation for harm done to it, not for personal gain of the initiating shareholder.

If Eilene, a Shareholder, Sues in a Derivative Suit, the Judgment