Strike suit explained
A strike suit is a lawsuit of questionable merit[1] brought by a single person or group of people with the purpose of gaining a private settlement before going to court that would be less than the cost of the defendant's legal costs.[2] Such suits frequently appear where the defendant is a considerably larger entity than the plaintiff, such as a corporation or an estate.
Strike suits in securities law
Company shareholders sometimes use strike suits as a means of addressing perceived failures by or discontentment with the company while avoiding becoming embroiled in litigation themselves.
- A minor shareholder sues a company for falling short on projected earnings. The lawsuit makes multiple technical claims of incompetence by the company.
- A minor shareholder sues a company for failure to follow bylaws set by the company. The lawsuit makes multiple technical claims of bylaw infractions by the company.
See also
Notes and References
- Badawi . Adam B. . Webber . David H. . David H. Webber . Does the Quality of the Plaintiffs' Law Firm Matter in Deal Litigation? . The Journal of Corporation Law . 2015 . 41 . 2 . 104 . 19 November 2019.
- Web site: Fox . Merritt B. . Required Disclosure And Corporate Governance . Law And Contemporary Problems . 2008-10-15.
