Oregon Statutes 63.801 – Derivative proceedings
(1) A member may not commence a proceeding in the right of a domestic or foreign limited liability company unless the person was a member of the limited liability company when the transaction complained of occurred or unless the member became a member through transfer by operation of law from one who was a member at that time.
Terms Used In Oregon Statutes 63.801
- Articles of organization: means the document described in ORS § 63. See Oregon Statutes 63.001
- Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
- Foreign limited liability company: means an entity that is an unincorporated association organized under laws other than the laws of the state and that is organized under a statute under which an association may be formed that affords to each of the entity's members limited liability with respect to the liabilities of the entity. See Oregon Statutes 63.001
- Member: means a person with both an ownership interest in a limited liability company and all the rights and obligations of a member specified under this chapter. See Oregon Statutes 63.001
- Operating agreement: means any valid agreement, written or oral, of the member or members as to the affairs of a limited liability company and the conduct of the limited liability company's business. See Oregon Statutes 63.001
- Person: means an individual or entity. See Oregon Statutes 63.001
- Proceeding: means any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigatory and whether formal or informal. See Oregon Statutes 63.001
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(2) Except as otherwise provided in writing in the articles of organization or any operating agreement, a complaint in a proceeding brought in the right of a limited liability company must allege with particularity the demand made, if any, to obtain action by the managers or the members who would otherwise have the authority to cause the limited liability company to sue in its own right, and either that the demand was refused or ignored or the reason why a demand was not made. Whether or not a demand for action was made, if the limited liability company commences an investigation of the charges made in the demand or complaint, the court may stay any proceeding until the investigation is completed.
(3) A proceeding commenced under this section may not be discontinued or settled without the court’s approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interest of the members or a class of members, the court shall direct that notice be given to the members affected. [1993 c.173 § 95]
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