180.0741 Standing. A shareholder or beneficial owner may not commence or maintain a derivative proceeding unless the shareholder or beneficial owner satisfies all of the following:
(1) Was a shareholder or beneficial owner of the corporation at the time of the act or omission complained of or became a shareholder or beneficial owner through transfer by operation of law from a person who was a shareholder or beneficial owner at that time.
(2) Fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.
History: 1989 a. 303; 1991 a. 16.
A plaintiff does not fairly and adequately represent the interest of the corporation when a derivative action is used for personal advantage. Whether or not a personal agenda exists is determined by the trial court. Read v. Read, 205 Wis. 2d 558, 561 N.W.2d 768 (Ct. App. 1996), 95-2453.
To bring an individual claim for breach of fiduciary duty, the complaint must allege facts sufficient, if proved, to show an injury personal to the complainant, rather than primarily to the corporation. The plaintiff must also show that each defendant had a fiduciary duty to the plaintiff in respect to corporate affairs that to each defendant constitutes a breach. Generally a claim of waste of corporate assets must be brought in a derivative action and not as a direct action. Reget v. Paige, 2001 WI App 73, 242 Wis. 2d 278, 626 N.W.2d 302, 99-0838.
Derivative claims are those a corporation could bring because the corporation's assets are affected. If the injury is one primarily to the corporation, a plaintiff must allege that it was a registered shareholder at the time of the transaction of which it complains. The failure to plead registered shareholder status requires the dismissal of derivative claims. Borne v. Gonstead Advanced Techniques, Inc. 2003 WI App 135, 266 Wis. 2d 253, 667 N.W.2d 709, 01-2624.
To have standing pursuant to this section, one must be a current shareholder to initiate a claim on behalf of the corporation. Krier v. Vilione, 2009 WI 45, 317 Wis. 2d 288, 766 N.W.2d 517, 06-1573.