Montana § 35-2-1304 Dismissal

Montana Statutes

§ 35-2-1304 — Dismissal

Montana § 35-2-1304

Title 35CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

Ch. 2NONPROFIT CORPORATIONS

Part 13Derivative Actions

This text of Montana § 35-2-1304 (Dismissal) is published on Counsel Stack Legal Research, covering Montana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Mont. Code Ann. § 35-2-1304 (2026).

Text

35-2-1304 . Dismissal.

(1)The court shall dismiss a derivative proceeding on motion by the corporation if one of the groups specified in subsection (2) or (6) has determined in good faith, after conducting a reasonable inquiry upon which its conclusions are based, that the maintenance of the derivative proceeding is not in the best interests of the corporation.

(2)Unless a panel is appointed pursuant to subsection (6), the determination in subsection (1) must be made by:

(a)a majority vote of independent directors present at a meeting of the board of directors if independent directors constitute a quorum; or

(b)a majority vote of a committee consisting of two or more independent directors appointed by majority vote of independent directors present at a meeting of the board of directors

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35-2-1304 . Dismissal. (1) The court shall dismiss a derivative proceeding on motion by the corporation if one of the groups specified in subsection (2) or (6) has determined in good faith, after conducting a reasonable inquiry upon which its conclusions are based, that the maintenance of the derivative proceeding is not in the best interests of the corporation.
(2) Unless a panel is appointed pursuant to subsection (6), the determination in subsection (1) must be made by:
(a) a majority vote of independent directors present at a meeting of the board of directors if independent directors constitute a quorum; or
(b) a majority vote of a committee consisting of two or more independent directors appointed by majority vote of independent directors present at a meeting of the board of directors, whether or not the independent directors constitute a quorum.
(3) None of the following may by itself cause a director to be considered not independent for purposes of this section:
(a) the nomination or election of the director by persons who are defendants in the derivative proceeding or against whom action is demanded;
(b) the naming of the director as a defendant in the derivative proceeding or as a defendant against whom action is demanded; or
(c) the approval by the director of the act being challenged in the derivative proceeding or demand if the act did not result in personal benefit to the director.
(4) If a derivative proceeding is commenced after a determination has been made rejecting a demand by a complainant, the complaint must allege with particularity facts establishing either that a majority of the board of directors did not consist of independent directors at the time the determination was made or that the requirements of subsection (1) have not been met.
(5) If a majority of the board of directors does not consist of independent directors at the time the determination is made, the corporation has the burden of proving that the requirements of subsection (1) have been met. If a majority of the board of directors consists of independent directors at the time the determination is made, the complainant has the burden of proving that the requirements of subsection (1) have not been met.
(6) Upon motion by the corporation, the court may appoint a panel of one or more independent persons to make a determination of whether the maintenance of the derivative proceeding is in the best interests of the corporation. In this case, the plaintiff has the burden of proving that the requirements of subsection (1) have not been met.