Alabama § 10A-2A-17.06 - Rights of Action.

§ 10A-2A-17.06. Rights of Action.

(a) Except in a proceeding authorized under Section 10A-2A-17.05(c) or this section, no person other than the corporation, or a stockholder in the right of the corporation pursuant to subsection (b), may bring an action or assert a claim with respect to the violation of any duty applicable to a benefit corporation or any of its directors under this article.

(b) Except for a proceeding brought under Section 10A-2A-17.05(c), a proceeding by a stockholder of a benefit corporation claiming violation of any duty applicable to a benefit corporation or any of its directors under this article:

(1) must be brought in a derivative proceeding pursuant to Division D of Article 7 of this chapter; and

(2) may be brought only by a stockholder of the benefit corporation that at the time of the act or omission complained of either individually, or together with other stockholders bringing such action collectively, owned directly or indirectly at least five percent of a class of the corporation’s outstanding stock or, in the case of a corporation with stock traded on an organized market as described in Section 10A-2A-13.02(b)(1)(i), either that percentage of shares of stock or shares of stock with a market value of at least $5 million at the time the proceeding is commenced.

(c) A suit under subsection (b) may not be maintained if, during the pendency of the suit, the stockholder individually fails, or the stockholders collectively fail, to continue to own directly or indirectly the lesser of (i) the number of shares of stock at the time the proceeding is commenced, (ii) a number of shares of stock representing five percent of a class of the corporation’s stock, or (iii) a number of shares of stock with a market value of at least $5 million.