Delaware is widely considered to be the corporate capital of the
United States. It is home to over a million corporations, including
over 60% of Fortune 500 companies.1 This is largely due
to Delaware's business-friendly legal system, which includes a
well-developed body of corporate law that provides corporations
with flexibility and predictability in their
operations.2
One key aspect of Delaware's corporate law is the
availability of shareholder derivative lawsuits. A derivative
action is a lawsuit brought by a stockholder, on behalf of the
corporation, to enforce a claim belonging to the
corporation.3 Generally, injuries to the corporation
which hurt the value of the corporation's stock or assets give
rise to claims belonging to the corporation. These lawsuits allow
shareholders to sue on behalf of the corporation when the
corporation's management or board of directors have failed to
act in the best interests of the company.4 Shareholder
derivative lawsuits have
