{"data":{"id":"us-ky/krs-386a.6-110","jurisdiction":"us-ky","citation":"KRS 386A.6-110","heading":"Action by beneficial owner.","body":"(1) A beneficial owner may maintain a direct action against a statutory trust or a\ntrustee to redress an injury sustained by, or to enforce a duty owed to, the\nbeneficial owner if the beneficial owner can prevail without showing an injury or\nbreach of duty to the trust.\n(2) A  beneficial owner may  maintain a derivative action to redress an injury\nsustained by or enforce a duty owed to a statutory trust if:\n(a) The  beneficial owner first makes a demand  on the trustees, requesting\nthat the trustees cause the trust to bring an action to redress the injury or\nenforce the right, and the trustees do not bring the action within a\nreasonable time; or\n(b) A demand would be futile.\n(3) A derivative action on behalf of a statutory trust may be maintained only by a\nperson that is a beneficial owner at the time the action is commenced  and who:\n(a) Was  a beneficial owner when  the conduct giving rise to the action\noccurred; or\n(b) Acquired the status as a beneficial owner by operation of law or pursuant\nto the terms of the governing instrument from a person that was  a\nbeneficial owner at the time of the conduct giving rise to the action\noccurred.\n(4) In a derivative action on behalf of the statutory trust, the complaint must state\nwith particularity:\n(a) The date and content of the plaintiff's demand  and the trustees' response\nto the demand; or\n(b) The reason the demand should be excused as futile.\n(5) The derivative proceeding shall not be maintained if:\n(a) It appears that the person commencing  the proceeding does not fairly\nand  adequately represent the interests of the beneficial owners  in\nenforcing the rights of the statutory trust; or\n(b) The person commencing  the proceeding ceases to be a beneficial owner\nin the statutory trust.\n(6) Except as otherwise provided in subsection (10) of this section:\n(a) Any  proceeds or other benefits of a derivative action on behalf of a\nstatutory trust, whether by judgment, compromise or settlement, are the\nproperty of the trust and not of the plaintiff; and\n(b) If the plaintiff receives any proceeds or other benefits, the plaintiff shall\nimmediately remit them to the trust.\n(7) A  derivative action on behalf of a statutory trust may  not be voluntarily\ndismissed or settled without the court's approval.\n(8) The  proper venue for a direct action under subsection (1) of this section or a\nderivative action in which the action is brought solely against one (1) or more\ntrustees shall be an appropriate court.\n(9) A beneficial owner associated with a series, if the series may pursuant to KRS\n386A.4-010(4) be sued in its own  name, may  bring an action pursuant to\nsubsection (1) or (2) of this section against only that series, the trustees\nassociated with the series, or both. If brought only against a series or the\ntrustees associated with the series, any demand  made pursuant to subsection\n(2)(a) of this section shall be upon the trustees associated with the series.\n(10) On  termination of the proceeding brought pursuant to this section, the court\nmay:\n(a) Require  the plaintiff to pay  any  defendant's reasonable expenses,\nincluding counsel fees, incurred in defending the proceeding to the extent\nit finds that the proceeding or any portion thereof was commenced  without\nreasonable cause or for an improper purpose; and\n(b) Require the statutory trust, or as appropriate a series thereof, to pay the\nplaintiff's reasonable expenses, including counsel fees, incurred in the\nproceeding if it finds that the proceeding has resulted in a substantial\nbenefit to the statutory trust or to a series thereof.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=47093","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:18Z","sha256":"620720a92f26b1fda0615622063db5bb10815d97262773101a8ca9dd3be38cb1","source_id":"us-ky","stale":false,"prev":"us-ky/krs-386a.6-100","next":"us-ky/krs-386a.7-010"},"notice":"GroundRules: Original legal text. Not legal advice."}