N.Y. Business Corporation Law § 627: Security for expenses in shareholders' derivative action brought in the right of the corporation to procure a judgment in its favor

§ 627. Security for expenses in shareholders' derivative action brought

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

favor.

In any action specified in section 626 (Shareholders' derivative

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

its favor), unless the plaintiff or plaintiffs hold five percent or more

of any class of the outstanding shares or hold voting trust certificates

or a beneficial interest in shares representing five percent or more of

any class of such shares, or the shares, voting trust certificates and

beneficial interest of such plaintiff or plaintiffs have a fair value in

excess of fifty thousand dollars, the corporation in whose right such

action is brought shall be entitled at any stage of the proceedings

before final judgment to require the plaintiff or plaintiffs to give

security for the reasonable expenses, including attorney's fees, which

may be incurred by it in connection with such action and by the other

parties defendant in connection therewith for which the corporation may

become liable under this chapter, under any contract or otherwise under

law, to which the corporation shall have recourse in such amount as the

court having jurisdiction of such action shall determine upon the

termination of such action. The amount of such security may thereafter

from time to time be increased or decreased in the discretion of the

court having jurisdiction of such action upon showing that the security

provided has or may become inadequate or excessive.