Colorado § 7-80-716 Dismissal of derivative proceeding

Colorado Statutes

§ 7-80-716 — Dismissal of derivative proceeding

Colorado § 7-80-716

Title 07Corporations

Art.Limited Liability Companies

This text of Colorado § 7-80-716 (Dismissal of derivative proceeding) is published on Counsel Stack Legal Research, covering Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Colo. Rev. Stat. § 7-80-716 (2026).

Text

(1)A derivative proceeding commenced pursuant to this part 7 shall be dismissed by the court on motion by the limited liability company if any one of the groups specified in subsection (2) of this section has determined in good faith, after conducting an inquiry upon which the determination is based, that the maintenance of the derivative action is not in the best interests of the limited liability company.

(2)(a) Subject to the requirements of paragraph (b) of this subsection (2), the determination whether the maintenance of the derivative proceeding is in the best interests of the limited liability company shall be made by the independent manager of the limited liability company or, where there is more than one such manager, by a majority of said managers; except that, if the

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(1) A derivative proceeding
commenced pursuant to this part 7 shall be dismissed by the court on motion by the
limited liability company if any one of the groups specified in subsection (2) of this
section has determined in good faith, after conducting an inquiry upon which the
determination is based, that the maintenance of the derivative action is not in the
best interests of the limited liability company.

(2) (a) Subject to the requirements of paragraph (b) of this subsection (2), the
determination whether the maintenance of the derivative proceeding is in the best
interests of the limited liability company shall be made by the independent
manager of the limited liability company or, where there is more than one such
manager, by a majority of said managers; except that, if there is no independent
manager of the limited liability company or if the majority of such managers is
unable to make the determination, the determination shall be made by a majority of
the independent members of the limited liability company.

(b) If the determination is not made pursuant to paragraph (a) of this
subsection (2), the determination shall be made by the person, or, in the case of
more than one person, by a majority of such persons, sitting upon a panel of one or
more persons appointed by a court upon motion filed with the court by the limited
liability company for such purposes.

(3) The court shall appoint only independent persons to the panel described
in paragraph (b) of subsection (2) of this section.

(4) None of the following shall by itself cause a person not to be considered
independent for purposes of subsection (2) of this section:

(a) The naming of the person as a defendant in the derivative proceeding or
as a person against whom action is demanded;

(b) The approval by such person of the act being challenged in the derivative
proceeding or demand where the act did not result in personal benefit to such
person;

(c) The making of the demand pursuant to section 7-80-714 or the
commencement of the derivative proceeding pursuant to this section.

(5) Subject to section 7-80-717, a panel appointed by the court pursuant to
paragraph (b) of subsection (2) of this section shall have such authority to continue,
settle, or discontinue the derivative proceeding as the court may confer upon such
panel.

(6) The plaintiff in the derivative proceeding shall have the burden of proving
that any of the requirements of subsections (1) and (2) of this section have not been
met.