OPINION
EASTAUGH, Justice.
I. INTRODUCTION
This appeal concerns attorney's fees and indemnification disputes arising after the superior court dismissed a derivative suit brought by shareholders of an Alaska Native Claims Settlement Act (ANCSA) village corporation. The plaintiffs sued without first making the pre-suit demand Alaska law requires. After the superior court dismissed the complaint for mootness, both sides sought attorney's fees and costs. Concluding that the shareholders did not prove that a pre-suit demand was excused, the superior court held that they were not prevailing parties and denied their attorney's fees motion. Finding that the defendant directors were prevailing parties, the court awarded them Alaska Civil Rule 82 attorney's fees against the plaintiff shareholders, and ordered the corporation to indemnify them under AS 10.06.490(c). Because the superior court did not err in holding that the shareholders did not prove that a demand was excused, we affirm the denial of the plaintiffs' fees request. But because the directors did not establish that they were Rule 82 prevailing parties, we vacate their attorney's fees award. And because they did not establish that they were "successful" litigants, we hold [739]*739that they were not entitled to indemnification under AS 10.06.490(c).
II. FACTS AND PROCEEDINGS
Carl J. Jerue, Jr. and Ernie Demoski, Sr. ("plaintiff shareholders") are shareholders of Ingalik, Incorporated, the ANCSA village corporation for the Native village of Anvik. Gloria Millett, Kenneth Chase, Shannon Chase, and Ted Kruger, Jr. ("defendant directors") were members of Ingalik's board of directors as of January 1998. On January 12, 1998 the Alaska Department of Commerce and Economic Development issued the corporation a Certificate of Involuntary Dissolution, citing the corporation's failure to file a biennial report or pay taxes.
On January 22, 1998 the plaintiff shareholders filed a derivative complaint against the defendant directors, alleging financial mismanagement and other wrongdoing. The complaint asked the court to compel the defendant directors to hold an annual shareholders' meeting to elect a new board of directors; to appoint Jerue as an interim director with authority to take whatever action was necessary to reinstate the corporation; and to issue a temporary restraining order prohibiting the defendant directors from "winding up" the corporation's affairs and distributing any corporate assets. Summonses were issued for the individual defendants on January 22, 1998.
In January Ingalik made reinstatement efforts; it returned to good standing with the state and was reinstated on February 6, 1998.
On April 6 the directors moved to dismiss. They argued that the plaintiff shareholders had not demonstrated that their failure to make a demand on the board was excused. They also argued that the complaint was moot because the corporation had been reinstated, it had scheduled an annual meeting, and its reinstatement meant its assets would not be distributed.
Ingalik held an annual shareholders' meeting on April 25. The shareholders reorganized the board by electing new directors, including both plaintiff shareholders; only one incumbent, defendant Kruger, was reelected. The new board met the next day and passed resolutions authorizing the corporation to join the lawsuit as a party plaintiff and denying indemnification to the defendant directors.
The plaintiff shareholders then asked the superior court to join Ingalik as a party plaintiff; the court did so on June 8. But on the same day, it also entered an order dismissing the derivative suit with prejudice. It retained jurisdiction for the purpose of determining prevailing party status and awarding costs and attorney's fees.
The defendant directors moved for a Civil Rule 82 fees award against the plaintiff shareholders individually; they also sought an order requiring Ingalik to indemnify their litigation costs under AS 10.06.490(c). The plaintiff shareholders and Ingalik (the "plaintiffs") opposed these requests and, claiming that they were the prevailing parties because the requested relief was achieved, cross-moved for an award of fees against the defendant directors under Civil Rules 23.1(j) and 82(a). Both sides relied on numerous documents in addition to their pleadings.
Following oral argument, the superior court ruled for the defendant directors on the fees and costs motions. It reasoned that the plaintiff shareholders had the burden of proving that they were excused from making the formal pre-suit demand Civil Rule 28.1(c) requires; it also reasoned that the directors' alleged practices gave rise to "any number of conflicting inferences" and "by no means" demonstrated that a majority of the directors were implicated in an injury to the corporation. It therefore concluded that a demand was not excused, that the defendant directors were entitled to dismissal under Civil Rule 28.1(d), and that the defendant directors were the prevailing parties under Civil Rule 82. It also concluded that the defendant directors' prevailing party status entitled them to full indemnification from the corporation under AS 10.06.490(c).
The judgment awarded the defendant directors $26,656.96 against Ingalik under AS 10.06.490(c) to indemnify their attorney's fees and costs, and $3,804.16 against Jerue and Demoski individually as costs and Rule 82 attorney's fees. The award against Ingalik [740]*740included the amount awarded against the individual plaintiff shareholders, and the judgment prevented the directors from recovering more than the total amount awarded against Ingalik.
Ingalik and the plaintiff shareholders argue on appeal that the superior court erred by (1) failing to award them costs and fees under Civil Rules 82 and 28.1() and AS 10.06.485(j); (2) granting costs and Civil Rule 82 attorney's fees to the defendant directors against the plaintiff shareholders; and (8) requiring the corporation to indemnify the defendant directors under AS 10.06.490(c).
III. DISCUSSION
A. - Standard of Review
We apply our independent judgment to questions of statutory interpretation 1 and must "adopt the rule of law that is most persuasive in light of precedent, reason, and policy." 2
For reasons we discuss in Part III. B.2, we review for abuse of discretion the superior court's fact-based determination that the plaintiff shareholders did not prove that a pre-suit demand was excused.3 The legal effect of that finding on the plaintiffs' motion for an award of litigation expenses presents a question of law which we review by applying our independent judgment.
Because it presents questions of law, we apply our independent judgment in reviewing the ruling that, because the plaintiff shareholders failed to prove that a demand was excused, the defendant directors were the prevailing parties under Rule 82(a).4 A determination of prevailing party status under Rule 82(a) will not be overturned unless it is manifestly unreasonable.5 We apply our independent judgment in reviewing the ruling that the defendant directors' prevailing party status entitled them to AS 10.06.490(c) indemnification, because this ruling presents a question of law.
B. Denial of Costs and Attorney's Fees to the Plaintiffs
Jerue, Demoski, and Ingalik first argue that it was error not to award them costs and attorney's fees against the defendant directors.6 They reason that they secured the relief their complaint sought, rendering the derivative suit "successful"; this made them, not the directors, the prevailing parties, entitling them to recover costs and fees from the defendant directors under Civil Rules 82(3) and 28.1(j) and AS 10.06.485(J).7
[741]*741Alaska Statute 10.06.4835(J) and Alaska Civil Rule 28.1(J) permit awards of expenses, including attorney's fees, to derivative suit plaintiffs, The statute and the rule are identical, They provide in pertinent part that "lf the derivative action is successful, in whole or in part, or if anything is received as a result of the judgment, compromise, or settlement of that action, the court may award to the plaintiff or plaintiffs reasonable expenses, including reasonable attorney fees." 8
Civil Rule 28.1(j) is a fee-sharing rule. It requires the corporation benefitted by a derivative suit to share the expense incurred by the plaintiff shareholders in achieving the benefit for the corporation.9 It reaches this result by requiring the corporation to reimburse the plaintiff shareholders. Because it is a fee-sharing rule, Rule 28.1(j) does not give the corporation itself a claim for fees or provide for an award against individual defendants.10 Moreover, here In-galik's successor board adopted a resolution authorizing Ingalik to reimburse "all legal fees and costs" incurred in behalf of Jerue and Demoski. Because the corporation has voluntarily agreed to share any litigation expense incurred by or for Jerue and Demoski individually, Rule 28.1(j) has no further direct application to this case: Its fee-sharing purpose was achieved without court order.
To illustrate the true nature of Ingalik's fees claim, we assume that a Rule 28.1(j) fees award could indirectly give rise to a corporate claim against derivative suit defendants. [742]*742Thus, perhaps a corporation ordered under Rule 23.1(j) to reimburse successful derivative-suit plaintiffs could seek indemnification, possibly on a subrogation theory, from the defendant officers or directors whose acts were the basis for the derivative suit and the Rule 23.1(j) award. But the court did not order Ingalik to pay those expenses; the corporation voluntarily agreed to pay them by resolution of April 26, 1998. And a subro-gated claim would give the corporation no greater rights than the plaintiff shareholders had. In short, no plaintiff in this case has a claim against these defendants under Rule 28.1).
Unlike Rule 23.1(j), Rule 82(a) is a fee-shifting rule.11 Rule 82(a) provides for an award of attorney's fees to "the prevailing party." - It is the proper framework for considering whether the defendant directors should reimburse attorney's fees directly incurred by Ingalik and attorney's fees incurred by or for Jerue and Demoski and potentially recoverable by Ingalik under an assignment or subrogation theory.
Because this is a shareholder derivative action, the question whether the plaintiffs were "prevailing parties" under Rule 82(a) ultimately depends at least in part on the principles that determine whether a shareholder derivative suit has been "successful." As we will see, this question turns on whether the superior court erred in concluding that the shareholders did not establish that their failure to make a demand on the board before suing was excused. This is so because, even though the plaintiff shareholders' litigation goals were achieved, there was a dispute about why they were achieved.
The shareholders filed suit in late January 1998 seeking reinstatement of the corporation and a shareholders' meeting at which new directors could be elected. The state reinstated the corporation in early February 1998. This prevented dissolution and distribution of corporate assets. The corporation held a shareholders' meeting to elect directors in April 1998. The relief the complaint sought was thus achieved, and in June the superior court dismissed the complaint with prejudice, apparently because the complaint was mooted by the corporation's reinstatement and the annual meeting.12
[743]*743We assume that derivative suit plaintiffs may not necessarily be ineligible to recover litigation expenses under Rule 28.1(J) even though a court dismisses their lawsuit after the board's remedial actions moot their derivative suit claims.13 Filing suit may force a recalcitrant board to act, securing a valuable benefit to the corporation. This may also be sufficient to make plaintiff shareholders (and a plaintiff corporation for whom they acted) "prevailing parties" for Rule 82(a) purposes.
We think that whether plaintiff shareholders are "prevailing parties" in a shareholder derivative action should turn on whether their lawsuit is "successful in whole or in part." 14 If a corporate benefit is achieved, the focus is on the causal relationship between the lawsuit and the benefit.15
We assume here that the individual plaintiffs and Ingalik were benefitted by actions-reinstating the corporation and holding the annual meeting-taken after the plaintiff shareholders sued. But were these actions the result of the suit? Or would they have been taken if the shareholders had made a formal demand before suing? Or, indeed, would they have been taken even absent either a pre-suit demand or any suit at all?
As we will see, the superior court's rejection of Jerue and Demoski's assertion that a demand was excused resolves these questions for purposes of the plaintiffs' motion for costs and attorney's fees. *
1. The requirement of a pre-guit formal demand
Before filing a shareholder derivative suit, a plaintiff is required by AS 10.06.485(c) and Civil Rule 28.1(c) to make a formal demand on the board "to secure the action the plaintiff desires," unless that demand is "excused." 16 The statute and the rule excuse the demand requirement if "a majority of the directors is implicated in or under the direct or indirect control of a person who is implicated in the injury to the corporation." 17
The statute and the rule require a shareholder who fails to make a formal demand to plead "with particularity" the facts establishing exeuse.18 The statute and the rule also impose on a shareholder opposing a motion to dismiss the burden of establishing excuse: "In a motion to dismiss for failure to make demand on the board the shareholder shall have the burden to establish exeuse.19
[744]*744Jerue and Demoski argue that they satisfied these requirements, despite their failure to make any pre-suit demand on the board; they assert that a demand would have been "futile."
The demand requirement is an important aspect of corporate democracy. Among other things, it gives the corporation a fair opportunity to decide whether to take action directly and to receive the proceeds of any recovery.20 And it gives the corporation an opportunity to remedy problems internally, without exposing it to avoidable litigation expense.21 The FuEetouEr CycLoPEDIA discusses the demand requirement:
The particularized pleading requirements are designed to strike a balance between a shareholder's claim of right to assert a derivative claim and a board of director[s'] duty to decide whether to invest resources of the corporation in pursuit of the shareholder's claim of corporate wrong. But the requirements of demand futility and refusal of demand are predicated upon and inextricably bound to issues of business judgment and standards of that doctrine's applicability. The demand requirement in derivative proceedings serves as a form of notice to the corporation. It is designed to assure that the shareholder affords the corporation the opportunity to address the alleged wrong without litigation and to control any litigation which does occur. It also provides a safeguard against abuse that could undermine the basic principle of corporate governance that the decisions of a corporation, including the decision to initiate litigation, should be made by the board of directors. A determination on a motion to dismiss, whether based on demand refused or demand excused, involves essentially a discretionary ruling on a predominantly factual issue.
The demand should provide the directors with sufficient information regarding the standing of the plaintiff, the relief sought, and the grounds for relief. In some states, the demand must be in written form. The directors have a reasonable time within which to investigate the claim and to make a decision, although some state statutes set forth a final time period. The demand inquiry and authority to respond may be delegated to a special litigation committee.[22]
2. - Applicable standard of review
We have never before addressed the demand requirement of AS 10.06.485(c) and Civil Rule 28.1(c), and have consequently never adopted a standard for reviewing a conclusion that shareholders did not meet their burden of establishing excuse.
Most appellate courts review for an abuse of discretion a trial court's determination that the demand requirement was not excused.[745]*74523 They typically apply that standard because determining the necessity of a demand is a fact-based inquiry. For example, in Lewis v. Graves, the United States Court of Appeals for the Second Circuit, applying the federal analog to Alaska Civil Rule 28.1,24 held that "the decision as to whether a plaintiff's allegations of futility are sufficient to exeuse demand depends on the particular facts of each case and lies within the discretion of the district court.25
Until recently, the mother court of corporate law,26 the Delaware Supreme Court, followed the same approach.27 But in Brehm v. Eisner, that court, applying the Delaware counterpart to Alaska Civil Rule 28.1, held that this issue is subject to de novo review.28 The court stated that a Rule 28.1 determination of pleading sufficiency this Court[ ] is merely reading the English language of a pleading and applying to that pleading statutes, case law and Rule 28.1 requirements. To that extent, our scope of review is analogous to that accorded a ruling under Rule 12(b)(6).29
In comparison, the United States Court of Appeals for the Third Circuit applies a mixed standard of review. In Garber v. Lego it stated:
To the extent that we are reviewing the district court's determination of demand futility based upon the facts of this case, the scope of our review is for abuse of discretion. Our review of the legal precepts employed by the district court and of its interpretation of those legal precepts is plenary.[30]
We choose to follow the Third Cireuit, and therefore adopt a mixed standard of review. We agree with the Delaware Supreme Court that it is a question of law whether pleadings satisfy a legal standard, such as the demand requirement. But the question of demand excuse potentially also involves fact-based analysis which is better reviewed under the abuse of discretion standard. This case demonstrates the factual nature of these disputes. A mixed standard of review recognizes that the superior court made both legal and factual determinations when it ruled, after considering materials beyond the pleadings, that the shareholders did not prove that demand was excused.
3. Excusing the failure to make a pre-suit demand
The pre-suit demand required by AS 10.06.485(c) and Alaska Civil Rule 28.1(c) is excused if "a majority of the directors is implicated in or under the direct or indirect control of a person who is implicated in the injury to the corporation." 31
Delaware and the federal courts frame the exception to the demand requirement in terms of futility.32 In those courts, making a demand is considered futile and thus excused where corporate officers and directors are under an influence rendering them incapable of making decisions for the corporation.33 Courts following the futility-of-demand principle apply procedural rules that differ from Alaska Civil Rule 28.1. Federal Civil Rule 28.1 and Delaware Chancery Court Rule 28.1 [746]*746are very similar to each other 34 and with regard to the demand requirement are nearly identical, Their pleading requirements implicitly address futility, but do not specify criteria for deciding when futility excuses a failure to make a demand:
The complaint shall also allege with particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff desires from the directors or comparable authority and the reasons for the plaintiff's failure to obtain the action or for not making the effort.[35]
It is not necessary in this case to decide whether excuse in Alaska is the same as excuse elsewhere. Alaska Statute 10.06.485(c) and Alaska Civil Rule 28.1(c) were not modeled after a specific state provision or model code.36 Although our standard is similar to that applied in some other jurisdictions to discern when demand would be futile,37 the plain text of our rule provides a specific test for exeuse: establishing that a majority of the directors are "implicated in the injury to the corporation." 38 The Alaska Code Revision Commission's study of Alaska's proposed revised Corporations Code before it was enacted in 1988 supports this interpretation:
Section 485¢ requires that a qualified shareholder make a demand upon the board to secure such action as the plaintiff desires, unless the shareholder can show that such demand would be futile. Under Section 4385(d), the burden to establish excuse is upon the plaintiff-shareholder. If a demand on the board is not exeused, Section .485(e) provides that a decision by the board, consonant with its duties of care and loyalty, that in its business judgment such litigation would not be in the best interest of the corporation, terminates the right created by Section .485(a). A shareholder is thereafter precluded from offering evidence that any or all of the directors who have decided that the litigation not go forward are implicated in the wrong complained of.[39]
4, Demand in this case
Because the superior court did not base its denial of the shareholders' fees motion on the sufficiency of their complaint, it is unnecessary to decide whether their complaint sat-isfled the requirement that it "state with particularity the facts establishing excuse. ..." 40 The court instead ruled after it reviewed the documents the parties submitted or discussed when they briefed the excuse issue in their competing motions for attorney's fees. The superior court held that "the practices complained of give rise to any number of conflicting inferences-but by no means demonstrate that 'a majority of the [747]*747directors [were] ... implicated in [an] injury to the corporation. "
Moreover, because there was no injury to the corporation, the superior court did not abuse its discretion by so holding. The plaintiff shareholders submitted numerous documents to support their request for attorney's fees and to oppose the defendant directors' requests for attorney's fees and indemnification. But these materials and the remainder of the undisputed record did not establish that the board would have rejected a demand to reinstate the corporation and hold the annual meeting. Nor did they establish that the lawsuit achieved these benefits. Instead, the record contains evidence that would have permitted a finding that the board would have reinstated the corporation and held the meeting whether or not there was a demand or a lawsuit. This included evidence (attached to the plaintiffs' complaint or found in affidavits they submitted to the superior court) that the defendant directors had attempted to hold the annual meeting as recently as the prior fall; that they had met only thirty-six days before the plaintiffs filed suit; that even before the plaintiffs sued, the defendant directors had written the corporation's shareholders to encourage them to fill vacancies on the board until the next annual meeting and election; that they had already scheduled a shareholders' meeting for June; and that when the corporation had failed to pay its taxes in the past, on each occasion it was reinstated and its assets were not liquidated. Moreover, plaintiffs' exhibits listed corporate checking account transactions; one is for a January 7, 1998 check payable to the State of Alaska for "biennal [sic] filing fee," suggesting that the directors had taken steps to reinstate the corporation weeks before plaintiffs filed suit.41
5. How the unexcused failure to make demand affects plaintiffs' attorney's fees motion.
The plaintiff shareholders cannot recover litigation expenses because their case was dismissed for mootness before they either made a demand or proved that demand was excused. Failure to prove that demand was excused necessarily means that they did not show that the corporation would not have been reinstated and that the annual meeting would not have been held if they had not sued. Because the court dismissed their action for mootness, the plaintiffs could not recover litigation expenses unless they showed that their suit was "successful," ie., that it conferred some measurable benefit on the corporation even though the court dismissed their complaint. But by failing to prove that a demand was excused, they nee-essarily failed to establish that the board would not have reinstated the corporation and held the annual meeting but for the lawsuit.
In the narrow context of derivative suits, failure to make a demand or prove that demand was excused is fatal to an award of attorney's fees and costs because a pre-suit demand might have prompted remedial action without need for litigation. The policy rationale of the demand requirement dictates this result. Demand is required to give a corporation the opportunity to rectify an alleged wrong without litigation and to control any litigation which does arise.42 Awarding litigation expenses without a demand or proof of demand excuse would undermine the demand requirement and these policy objectives. Moreover, the modern reality of large corporations requires this result. At any given moment a large corporation may be the subject of a number of derivative suits filed by shareholders. In this context, almost any action taken by a corporate board could arguably satisfy some - plaintiffs - lawsuit. Awarding fees without requiring demand or proof of demand excuse would open corporations to unwarranted fees claims predicated on unrelated corporate actions.
[748]*748In this case, without proof of demand excuse, and particularly given Ingalik's past course of corporate events, the trial court permissibly might have found that this corporation would have been reinstated and the meeting held even without a demand or a lawsuit. Therefore, the shareholders' failure to prove that demand was excused meant that they did not prove that the derivative suit was "successful." 43 This meant that Jerue and Demoski were not entitled to an award of attorney's fees and costs.
An inverse hypothetical helps demonstrate the significance of failing to make a demand or prove demand excuse. Consider a dissenting shareholder whose attorney makes a timely demand upon directors before filing a derivative suit. If the directors promptly take curative action that satisfies the shareholder's concerns, there would be no suit and clearly no attorney's fees awarded to the shareholder. This illustrates the importance of the demand requirement and explains why we must affirm the denial of fees to Jerue and Demoski. The reasoning is twofold: First, if the hypothetical shareholder who satisfies the demand procedure is not entitled to attorney's fees, it is inequitable to award fees to shareholders who failed to make a demand or prove that it was excused. Second, awarding fees to Jerue and Demoski would undermine successful operation of the demand requirement as illustrated above, and encourage wasteful litigation that could have been avoided if demand were properly made.
Ingalik has not clearly explained on what theory it should be awarded fees. It must demonstrate its prevailing party status to recover fees under Rule 82(a). But if the plaintiff shareholders who asserted claims in the corporation's behalf are not prevailing parties, we do not see how the corporation can be a prevailing party as to those claims, either. Any attorney's fees claim Ingalik could pursue under subrogation or assignment theories to recover its voluntary payment of Jerue and Demoski's fees would be subject to the considerations that bar Jerue and Demoski's fees motion. Ingalik apparently also seeks an award for the post-Jjoin-der fees it incurred directly. But because Ingalik did not become a party plaintiff until after the events occurred that mooted the derivative suit, it is not a prevailing party for purposes of recovering those fees, either.
We therefore conclude that the superior court did not err in denying the plaintiffs' attorney's fees motion.
C. The Defendant Directors' Rule 82 Attorney's Fees Award
The superior court awarded the defendant directors Rule 82 prevailing party attorney's fees against Jerue and Demoski. In arguing that this was error, Jerue and Demoski contend in part that they, not the directors, were the prevailing parties because their complaint was dismissed for mootness and because they "accomplished what they had hoped to with this litigation." They assert that the "burden was on the former management to argue and show that the annual meeting ... would have happened without the suit."
A litigant seeking Rule 82 attorney's fees must show that it is the prevailing party.
We first reject the directors' assertion that, because the superior court granted their motion to dismiss with prejudice, they were the prevailing parties.44 Because the court dismissed the complaint for mootness, it is no more likely that the directors achieved their litigation goals than the plaintiffs.
The court apparently based its finding that the directors were the prevailing parties on its October conclusion that the shareholders had not proved that demand was excused. This conclusion did not alter the reason for the June dismissal or turn the dismissal order into a ruling on the merits. Dismissing for mootness did not explicitly or implicitly resolve the issue of who prevailed, and in[749]*749deed, the court stated it was retaining jurisdiction to decide "prevailing party status." That question turned on an issue-whether demand was excused-the court had not resolved in June.
We assume for discussion's sake that if a shareholder derivative lawsuit were the only reason directors took remedial actions bene-fitting a corporation and mooting the complaint, the directors would not be the prevailing parties.45 And as we noted in Part IILB, under some circumstances plaintiffs may be able to recover attorney's fees in at least some types of cases dismissed for mootness.46 But the ruling that these plaintiffs did not bear their burden of proving excuse did not amount to a finding that the board would have heeded a pre-suit demand or that its remedial actions were unrelated to the lawsuit.
In general, we are reluctant to encourage parties in a lawsuit dismissed for mootness to litigate the merits only to establish for Rule 82 purposes who would have been the hypothetical prevailing party. Rule 82 is only intended to partially compensate prevailing parties, not to provide an incentive for merits litigation that would not otherwise take place.47
Evidence, discussed in Part III.B.4, would have permitted a finding that the directors would have cured the corporate deficiencies absent the lawsuit. But the memorandum opinion awarding fees did not refer to this evidence. And it did not find that the directors would have remedied the deficiencies either spontaneously or in response to a pre-suit demand. Nor did it find that the actions that mooted the complaint and benefitted the corporation were not attributable to the lawsuit. The evidence would not have compelled such findings. The directors provided no direct evidence why they acted, and no director offered an affidavit explaining why the old board acted. The superior court recognized when it denied the shareholders' Rule 28.1(J) attorney's fees motion that there were conflicting inferences about whether a majority of the directors were implicated in an injury to the corporation. These conflicting inferences were also relevant to the reasons the board acted.
In summary, the plaintiffs' failure to meet their burden of proving that a formal demand was excused did not necessarily mean that the directors were the prevailing parties. Because the complaint was dismissed as moot shortly after its filing as a result of the defendants' apparently responsive actions, it would be unrealistic to treat the directors as prevailing parties unless they demonstrated why the suit became moot, ie., why the corporation was reinstated and the annual meeting was accelerated. Notwithstanding other evidence permitting conflicting factual inferences, the directors offered no direct evidence why things were done that gave the plaintiffs the relief they requested. Because we conclude as a matter of law that the directors did not meet their burden of proof on the issue of prevailing party status, we vacate their Rule 82 attorney's fees award and remand for entry of a corrected judgment.48
D. The Directors' Statutory Indemnification Award
The superior court ruled that the directors' "prevailing party status also" entitled them under AS 10.06.490(c) to full indemnification from Ingalik.49 The plaintiff [750]*750shareholders and Ingalik argue that because the court did not find the election and all subsequent board action to be invalid, the business judgment rule required the court to enforce the new board's resolution that denied indemnification to the defendant directors.50 The defendant directors respond that because indemnification under AS 10.06.490(c) was mandatory, the board had no authority to adopt a resolution denying them indemnification.51
This issue turns on whether the defendant directors satisfied their burden of demonstrating that they were entitled to indemnification under AS 10.06.490(c). We conclude that they did not. We therefore vacate the indemnification award and remand for entry of a corrected judgment.
It appears that indemnification is mandatory if the conditions of AS 10.06.490(c) are met, because that subsection provides that a corporate director who "has been successful on the merits or otherwise" in defense of certain lawsuits-including derivative suits-"shall be indemnified." 52 We assume that if this subsection applies, mandating indemnification, the board has no discretion to adopt a resolution denying indemnification.
But to be eligible for mandatory indemnification under AS 10.06.490(c), these defendant directors had to have "been successful on the merits or otherwise in defense of an action...." 53 The defendant directors did not demonstrate that they successfully defended the litigation on its "merits or otherwise"; they simply obtained dismissal of the complaint, apparently by providing the relief the complaint sought. As discussed in Part IIIC, above, the defendant directors did not establish why the remedial actions were taken. The conflicting inferences about how the lawsuit came to be mooted also pertain to the issue whether the directors successfully defended the litigation. Because the defendant directors did not establish why action was taken that mooted the complaint, they did not meet their burden of establishing a right to mandatory indemnification under AS 10.06.490(c). The plaintiffs' failure to prove that a demand was excused does not mean that the defendant directors must have been [751]*751"successful" in defending the suit. The complaint was dismissed for mootness, not on a theory demand was unexcused.
Few cases discuss equivalent situations. Courts requiring mandatory indemnification under substantially identical statutes do so when the defendant achieves success on the merits or otherwise, including termination of claims by agreement without any payment or assumption of liability.54 Courts are relue-tant to ask why the result was achieved.55 But in those cases, it appears that the defendants did nothing to achieve the dismissal; they certainly paid no consideration, and they took no corrective action that mooted the lawsuits.
Because the superior court did not apply the statutory standard for determining whether the defendant directors were entitled to indemnification under AS 10.06.490(c), we must vacate the indemnification award. And because the directors simply asserted below that the dismissal with prejudice entitled them to indemnification, they failed to establish that the dismissal was not attributable at least in part to a desire to resolve the lawsuit. We therefore remand for entry of a corrected judgment that deletes the indemnification award.
IV. CONCLUSION
The plaintiff shareholders are not prevailing parties because the court found that their failure to make a demand was not excused. In the absence of a demand, it is uncertain whether the defendant directors would have responded to a demand as they responded to the lawsuit, affording the plaintiffs the relief they sought. Although the suit might factually have brought about the relief, this is not enough. Plaintiffs must show that a demand would not have resulted in the same relief. Because this is difficult to show and the difficulty is a product of their failure to make a demand, they can not be regarded as prevailing parties.
The defendant directors are not prevailing parties because they did not prove that the lawsuit was not a cause of the remedial action they took, or that if a demand had been made they would have taken the remedial action.
For these reasons, we (1) AFFIRM the superior court's holding that the plaintiff shareholders were not prevailing parties and were consequently not entitled to attorney's fees under Civil Rules 28.1 and 82; (2) VACATE the award of costs and Civil Rule 82 attorney's fees to the defendant directors against the plaintiff shareholders; (8) VACATE the defendant directors' award of indemnification under AS 10.06.490(c); and (4) REMAND for entry of a corrected judgment reflecting that all parties are to bear their own costs and attorney's fees.56
This opinion replaces Opinion No. 5650 issued December 13, 2002. In response to appellees' petition for rehearing, the court adds footnote 56.