Question

Darius is a shareholder of Energy Renewable, Inc When the directors fail to undertake an action to redress a wrong suffered by the corporation, Darius files a suit on the firm's behalf. ​ Any damages recovered by Darius's suit will normally go to:______
A) Darius
B) Energy Renewable.
C) Energy Renewable's directors.
D) Energy Renewable's shareholders.

Answer 1

Answer: Any damages recovered by Darius's suit will normally go to ENERGY RENEWABLE.

Explanation: This damages will typically go to energy renewable because this is an example of a derivative suit. A Derivative suit is defined as a case where two or more people disagree and a shareholder on behalf of a corporation takes the case to a court for resolution. Shareholder derivative suits permit a shareholder to initiate a suit when management has failed to do so.