"Direct or Derivative? Direct Injury Test Applied to LLC Member from Asserting Claims," DRI Covered Events
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"Direct or Derivative? Direct Injury Test Applied to LLC Member from Asserting Claims," DRI Covered Events

March 21, 2011

Featured Article: “Direct or Derivative? Direct Injury Test Applied to LLC Member from Asserting Claims,” DRI Covered Events, March 21, 2011

 “Traditionally, courts apply the direct injury test to determine if a shareholder’s claim must be raised derivatively. The issue in these situations becomes whether the primary injury for which relief is sought directly affects an interest the claimant holds, or if it injures a legal entity’s interest, which then derivatively injures the claimant. In other words, the critical question posed by this test is whether the damages a plaintiff sustains are derivative of an injury to a third party.”