N.Y. Banking Law § 6025: Stockholders' derivative action brought in the right of the corporation to procure a judgment in its favor

§ 6025. Stockholders' derivative action brought in the right of the

corporation to procure a judgment in its favor. 1. An action may be

brought in the right of a corporation to procure a judgment in its

favor, by a holder of shares or of a beneficial interest in such shares.

2. In any such action, it shall be made to appear that the plaintiff

is such a holder at the time of bringing the action and that he was such

a holder at the time of the transaction of which he complains, or that

his shares or his interest therein devolved upon him by operation of

law.

3. In any such action, the complaint shall set forth with

particularity the efforts of the plaintiff to secure the initiation of

such action by the board or the reasons for not making such effort.

4. Such action shall not be discontinued, compromised or settled,

without the approval of the court having jurisdiction of the action. If

the court shall determine that the interest of the stockholders of any

class or classes thereof will be substantially affected by such

discontinuance, compromise, or settlement, the court, in its discretion,

may direct that notice, by publication or otherwise, shall be given to

the stockholders or class or classes thereof whose interests it

determines will be so affected; if notice is so directed to be given,

the court may determine which one or more of the parties to the action

shall bear the expense of giving the same, in such amount as the court

shall determine and find to be reasonable in the circumstances, and the

amount of such expense shall be awarded as special costs of the action

and recoverable in the same manner as statutory taxable costs.

5. If the action on behalf of the corporation was successful, in whole

or in part, or if anything was received by the plaintiff or plaintiffs

or a claimant or claimants as the result of a judgment, compromise or

settlement of an action or a claim, the court may award the plaintiff or

plaintiffs, claimant or claimants, reasonable expenses, including

reasonable attorney's fees, and shall direct him or them to account to

the corporation for the remainder of the proceeds so received by him or

them. This subdivision shall not apply to any judgment rendered for the

benefit of injured stockholders only and limited to a recovery of the

loss or damage sustained by them.