| Old | New | Differences | |
|---|---|---|---|
| 1 | 1 | By: Estes S.B. No. 1568 | |
| 2 | 2 | (Elkins) | |
| 3 | 3 | ||
| 4 | 4 | ||
| 5 | 5 | A BILL TO BE ENTITLED | |
| 6 | 6 | AN ACT | |
| 7 | 7 | relating to shareholder standing after a merger. | |
| 8 | 8 | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | |
| 9 | 9 | SECTION 1. Section 21.552, Business Organizations Code, is | |
| 10 | 10 | amended to read as follows: | |
| 11 | 11 | Sec. 21.552. STANDING TO BRING PROCEEDING. [(a)] A | |
| 12 | 12 | shareholder may not institute or maintain a derivative proceeding | |
| 13 | 13 | unless: | |
| 14 | 14 | (1) the shareholder: | |
| 15 | 15 | (A) was a shareholder of the corporation at the | |
| 16 | 16 | time of the act or omission complained of; or | |
| 17 | 17 | (B) became a shareholder by operation of law from | |
| 18 | 18 | a person that was a shareholder at the time of the act or omission | |
| 19 | 19 | complained of; and | |
| 20 | 20 | (2) the shareholder fairly and adequately represents | |
| 21 | 21 | the interests of the corporation in enforcing the right of the | |
| 22 | 22 | corporation. | |
| 23 | 23 | [(b) To the extent a shareholder of a corporation has | |
| 24 | 24 | standing to institute or maintain a derivative proceeding on behalf | |
| 25 | 25 | of the corporation immediately before a merger, Subchapter J or | |
| 26 | 26 | Chapter 10 may not be construed to limit or terminate the | |
| 27 | 27 | shareholder's standing after the merger.] | |
| 28 | 28 | SECTION 2. This Act takes effect September 1, 2011. |