Michigan Compiled Laws
Article 5 - (450.4501...450.4515)
Section 450.4512 - Dismissal of Derivative Proceeding; Findings; Burden of Proof; Determination; “Disinterested” Defined.

Sec. 512.
(1) The court shall dismiss a derivative proceeding if, on motion by the limited liability company, the court finds that 1 of the groups specified in subsection (3) has made a determination in good faith after conducting a reasonable investigation upon which its conclusions are based that the maintenance of the derivative proceeding is not in the best interests of the company.
(2) If the determination is made pursuant to subsection (3)(a) or (b), the company has the burden of proving the good faith of the group making the determination and the reasonableness of the investigation. If the determination is made pursuant to subsection (3)(c), the plaintiff has the burden of proving that the determination was not made in good faith or that the investigation was not reasonable.
(3) A determination under subsection (1) may be made by any 1 of the following:
(a) By a majority vote of the disinterested managers or members having the authority to cause the company to sue in its own right, if the disinterested managers or members constitute a majority of those having the authority to cause the company to sue in its own right.
(b) By a majority vote of a committee consisting of 2 or more disinterested managers or members appointed by a majority vote of disinterested managers or members, whether or not the disinterested managers or members constitute a majority of those having the authority to cause the company to sue in its own right.
(c) By a panel of 1 or more disinterested persons appointed by the court upon motion by the company.
(4) For purposes of this section, "disinterested" means a person who is not a party to a derivative proceeding or a person who is a party if the limited liability company demonstrates that the claim asserted against the person is frivolous or insubstantial.
History: 1993, Act 23, Eff. June 1, 1993

Structure Michigan Compiled Laws

Michigan Compiled Laws

Chapter 450 - Corporations

Act 23 of 1993 - Michigan Limited Liability Company Act (450.4101 - 450.5200)

Article 5 - (450.4501...450.4515)

Section 450.4501 - Members; Admission; Liability for Acts, Debts, or Obligations.

Section 450.4502 - Members; Voting Rights.

Section 450.4503 - Members; Obtaining Certain Financial Statements and Tax Returns; Inspecting and Copying Records; Obtaining Other Information; Formal Accounting of Company's Affairs.

Section 450.4504 - Membership Interest as Personal Property.

Section 450.4505 - Membership Interest; Assignment; Liability of Assignee; Assignor as Member; Liability of Assignor Not Released.

Section 450.4506 - Assignee of Membership Interest; Conditions for Membership; Rights and Powers; Liability for Obligations of Assignor.

Section 450.4507 - Charging Membership Interest With Payment of Judgment; Rights of Judgment Creditor; Rights and Powers of Member; Charging Order as Lien on Membership Interest; Section as Exclusive Remedy.

Section 450.4508 - Encumbrance Against Membership Interest; Effect.

Section 450.4509 - Withdrawal of Member; Distribution; Expulsion.

Section 450.4510 - Commencement and Maintenance of Civil Suit by Company; Conditions.

Section 450.4511 - Investigation of Allegations; Stay of Derivative Proceeding.

Section 450.4512 - Dismissal of Derivative Proceeding; Findings; Burden of Proof; Determination; “Disinterested” Defined.

Section 450.4513 - Discontinued or Settled Derivative Proceeding; Court Approval Required; Notice; Expense.

Section 450.4514 - Termination of Derivative Proceeding; Court Order.

Section 450.4515 - Action in Circuit Court; Grounds; Order or Grant of Relief; “Willfully Unfair and Oppressive Conduct” Defined.