Derivative action

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§ 1301. Derivative action

A member may maintain a derivative action to enforce a right of a mutual benefit enterprise if:

(1) the member demands that the enterprise bring an action to enforce the right; and

(2) any of the following occur:

(A) the enterprise does not, within 90 days after the member makes the demand, agree to bring the action;

(B) the enterprise notifies the member that it has rejected the demand;

(C) irreparable harm to the enterprise would result by waiting 90 days after the member makes the demand; or

(D) the enterprise agrees to bring an action demanded and fails to bring the action within a reasonable time. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)


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